Bitcoin’s Post-Midterm Performance Hinges on ETFs, Yields, and Regulation
As the US midterm elections approach, Bitcoin's performance in the months following these events has historically been strong, but analysts caution against relying solely on past trends. Bitcoin has seen significant gains in the 12 months after the 2014, 2018, and 2022 midterms, with increases of 24.5%, 44.9%, and 92.3%, respectively. However, the S&P 500 has also appreciated in all 19 12-month periods following midterm elections since 1950, averaging a 15.4% gain. Despite these positive trends, XWIN Japan analysts warn that Bitcoin's past performance does not guarantee future results, especially given the limited data available.
Key factors that could influence Bitcoin's post-midterm performance include sustained buying through exchange-traded funds (ETFs), cooling Treasury yields, and clearer regulatory frameworks. Analysts suggest that reduced political uncertainty might encourage risk-taking, but lasting gains will depend on supportive market conditions. As of now, Bitcoin is trading around $86,000, up about 3% over seven days and nearly 8% over one month, but still down 31% from a year ago and 32% below its record high of $126,000.
Looking ahead, analysts like Iliya Kalchev of Nexo Dispatch attribute Bitcoin's recent rally to bond market changes, such as the US Treasury's long-end bond buybacks in August and positive spot ETF flows. Lacie Zhang of Bitget Wallet predicts a 25 basis point rate hike by the Federal Reserve on October 28, which could impact Bitcoin's price just before the midterm elections. Zhang also identifies $87,500 as a key resistance level, with a break above potentially triggering a short squeeze, while a drop below $82,000 to $82,500 could push Bitcoin below $80,000.