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From the US election to the state of the network: Where will the digital currency market go?


The resurgence of the corona, the state of the network, the state of futures markets and, most importantly, the US election are among the most important factors that can affect the price of bitcoin. The key question is, where will the digital currency market go next?

To Report The Quinn Telegraph started the bitcoin price this month (November) when its candle closed last month, very close to the highest monthly closing price.

Here are five price factors that may affect the price of bitcoin in the midst of the US election and the resurgence of the coronavirus and the beginning of a new wave of quarantine in Europe.

Biden or Trump?

Tomorrow is the American election; A day that has historically had a far-reaching impact on the bitcoin price trend, and the upcoming elections are no exception.

The US election is taking place amid the outbreak of the Corona virus, which has disrupted the lives of many Americans. On the other hand, the market is waiting for the outcome of this election; Because the policies of the new president will also affect the price of the king of digital currencies.

It should not be forgotten that the effects of the corona virus are not only visible in the community and the economy is not immune to the bite of this virus. One of the consequences of the Corona outbreak on the economy is the purchase of bitcoins by large companies such as Square and MicroStrategy; These companies have turned to buying bitcoins to protect themselves against the devaluation of currencies.

Many experts believe that, regardless of who wins the US election, safe havens for capital such as gold will continue to grow. Despite the fact that Bitcoin has recently reduced its correlation with major financial markets, it may still be affected by the strength of the dollar.

On Monday, the US dollar index continued to rise above the range above 94. It is worth noting that the correlation between this index and the price of Bitcoin has been reversed; This means that with the strengthening of this index, the price of bitcoin will decrease.

Dollar price index
Dollar price index

Market analyst Holger Zschaepitz tweeted Monday:

Rising Chinese industrial activity, the US election and the Federal Reserve meeting pushed Asian stock markets to current high levels. Such events could determine the future trend of the market in the continuation of 2020.

Shapitz also announced a few days ago that bitcoin is growing as countries’s global debt increases. Negative global bonds (conditions in which the lender actually benefits the recipient) rose from $ 17 trillion to $ 12 trillion in late 2019. “Shapitz said, ‘

Negative profits are good for Bitcoin; Because Bitcoin does not pay any interest on its own.

Europe welcomes money printing

Due to the quarantine imposed by the re-emergence of the coronavirus in Europe, the situation for the continental stock markets is described as deplorable.

The economic contraction in the European economy has caused the upward signs in the market to be less than ever. Referring to the state of these markets, Shapitz said that the German stock market lost $ 4.1 trillion last week alone. This rate has been unprecedented since the fall of March.

Bitcoin fans believe this is the best opportunity to shop; The European Central Bank (ECB) has also announced that it will offer more support packages and increase money printing.

A Twitter analyst named “MMCrypto” tweeted, referring to the new quarantine plans, that investment in Fiat money should be reduced. He wrote about this:

The strange news is that businesses that are forced to close will receive 75% of their profits through newly printed money.

Gap in futures contracts

Taking a closer look at the Bitcoin chart and the factors that could affect the price fluctuations of this digital currency, we find that the price fluctuations we saw over the weekend this year have created a new gap in future markets. .

Cracks are created when the closing price of the candle on the weekend is different from the opening price of the new candle on the first working day of the following week. Bitcoin generally behaves in such a way that it tends to fill these gaps. Usually, if this gap is recorded in higher ranges, the price will tend to increase, and if the gap is recorded in lower ranges, the price will fall to fill it.

Market analyst Zack Voell points to four gaps in the Bitcoin futures market at CME‌ in a recent statement. These gaps have been created over the past four weeks:

CME futures contracts have been open for four consecutive weeks. This is a very upward event.

On Monday, prices fell to $ 13,700, filling the gap.

On the historical Bitcoin price chart, the $ 16,000 gap has not yet been filled. On the other hand, the $ 9,600 gap has not been filled in the recent fall below $ 10,000.

Recent gaps in the Bitcoin futures chart
Recent gaps in the Bitcoin futures chart

Bitcoin Monthly Candle

Market analysts are optimistic about the closing of the monthly candle of this digital currency. But still, the price of Bitcoin has not managed to break the historical record of its price.

As mentioned earlier, the Bitcoin monthly candlestick in October was just a few dollars away from the highest monthly closing price of this digital currency in history.

Peter Brandt, a veteran analyst who has been able to predict the price of bitcoin several times, says the current situation is very promising.

Large-grain investors and investment institutions see the closing of the monthly candlelight as a vital tool for empowering the bullish sentiment in the market. It should not be forgotten that the price of Bitcoin at the beginning of October was $ 10,750. Brent writes in his tweet:

The closing price of Bitcoin in October was close to the highest monthly closing price of this digital currency. Where is the importance of monthly price? The value of an asset at the end of the month is especially important for investment institutions to increase their assets and investments in the market.

On the weekly chart, $ 14,000 is a strong resistance. If the price of Bitcoin can break the barrier of this significant resistance, it will be easy to reach its historic record of $ 20,000.

Network status

As we have mentioned in recent reports, in the current situation, the fundamental factors in the bitcoin network have undergone many changes.

Network toughness, which reflects the tough competition between miners and an important part of the bitcoin ecosystem, is expected to decline the most on Tuesday since March. At that time, the difficulty of the Bitcoin network was reduced by 14.27% as a result of the outbreak of the Corona virus and uncertainty.

This is not necessarily a bad thing. The less complex the network, the smaller the miners will have a better chance of making money. Increasing participation in the Bitcoin network, meanwhile, reduces network fees and faster block generation. It is worth noting that both fees and transaction speeds have increased significantly over the past two weeks.

Bitcoin network hash rate
Bitcoin network hash rate

Just like hardship, the network hash rate has been declining. The network stiffness has now risen from 146 exacerbations per second to about 107 exacerbations per second.

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