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Analyst: In each U.S. midterm election cycle, Bitcoin has shown a significant pullback, and attention should be paid to the key support level of $73,000

Cryptocurrency analyst Ali Charts stated that as the U.S. midterm elections on November 3 approach, investors may overlook the recurring phenomenon of Bitcoin pullbacks observed in previous election cycles. He believes that this election may once again be accompanied by significant volatility, and the downside risk is worth noting, with a key focus on the lower price level of $73,000. According to his statistics, during the U.S. midterm election cycles in 2010, 2014, 2018, and 2022, Bitcoin experienced pullbacks of 72%, 65%, 52%, and 27%, respectively.However, he emphasized that correlation does not imply causation; the election itself may not necessarily be the reason for the decline, as these pullbacks are also influenced by the overall market cycle of Bitcoin, liquidity conditions, and investor sentiment. Fourth-quarter returns also exhibit similar characteristics: in 2014, 2018, and 2022, Bitcoin fell by 16.7%, 42.16%, and 14.75% in the fourth quarter, respectively. The only exception was in 2010, when it rose by 391%, but Bitcoin was still in its early development stage at that time. Therefore, in the past four midterm election years, three of those years recorded negative returns in the fourth quarter.Regarding the subsequent trend, Ali Charts indicated that the area around $73,000 is close to the average purchase cost of current short-term Bitcoin holders, which can be used to observe the positions of recent investors entering the market. He pointed out that in an established bull market, Bitcoin often finds support near the cost of short-term holders after experiencing a significant pullback. He believes that if selling pressure accelerates after the election on November 3, pushing Bitcoin back down to around $73,000, that area will become an important position to test whether buyers are still willing to maintain the overall bullish trend. If the price continues to rebound from that area, it will strengthen the bullish judgment; in terms of operations, he will wait for signs of selling pressure exhaustion and renewed demand before considering establishing long positions.

CoinShares: Bitcoin shows resilience, but inflation pressure in the United States still limits market upside potential

CoinShares released a report indicating that Bitcoin has shown relative strength this week against the backdrop of renewed volatility in the risk asset market, primarily due to a rebound in spot buying, improved stock market sentiment, and some short covering. Overall, the market is gradually reducing its enthusiasm for the AI narrative and is instead focusing more on whether corporate earnings can meet expectations.The poor performance of some U.S. corporate earnings reports has triggered significant stock price fluctuations, which have also affected Bitcoin to some extent, but it still demonstrates strong resilience overall. Meanwhile, macroeconomic signals in the U.S. remain mixed, with the housing market continuing to weaken. In terms of interest rates, the market generally expects the Federal Reserve to maintain interest rates at the meeting on October 28. The market's expectations for another rate hike in December remain high, with the related probability close to 83%.The weakness in the housing market provides some room for the Federal Reserve to pause rate hikes, but last week's higher-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) data indicate that inflation remains a key factor limiting a shift in policy. If the Federal Reserve unexpectedly raises rates next week, it could trigger more pronounced financial market volatility due to exceeding market expectations; in contrast, maintaining interest rates and continuing to release hawkish signals would be easier for the market to digest. Overall, the current market remains in a state of intertwining bullish and bearish factors. Improved spot demand, Bitcoin's enhanced ability to withstand stock market volatility, and the cooling housing market all provide some support for the market; however, inflationary pressures have not yet dissipated, limiting the Federal Reserve's room to ease policy. The subsequent trend of Bitcoin is expected to remain highly influenced by interest rate expectations and the overall liquidity environment, with the importance of single industry or market catalysts being relatively limited.
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