Bitcoin enters US midterm election day above its 200-day average, breaking the pattern of 2014, 2018 and 2022. DWF Labs expects near-term volatility but sees history favoring bitcoin over 12 months.
Bitcoin traded near $76,990, about 5.2% above its 200-day average of roughly $73,169, as the US midterm elections begin. In each of the last three midterm cycles, the asset went in below that line.
Bitcoin sat below its 200-day average in 2014, 2018 and 2022
On the midterm election day in those years, bitcoin traded below the average by about 35%, 9% and 22% respectively. All three were bear market years, consistent with the four-year halving cycle, in which bitcoin peaks roughly 18 months after a halving and then drops into a year-long bear market.
This year was supposed to follow the same script after BTC peaked above $126,000 in October last year. However, the bear market was shallow and front-loaded, with much of the drop coming in January and February, which is why bitcoin already trades above the 200-day SMA.
DWF Labs expects choppy trading ahead
Past data shows BTC rallying significantly in the year after midterms, though it trades choppily in the short run, according to DWF Labs. Martin Lee, the firm's research lead, said in an email: "History favors BTC on a 12-month horizon, but expect near-term volatility"
The election outcome could decide the near-term market trend, along with ETF flows and the US jobs report due Friday, which affects Fed interest rate expectations.
Source: CoinDesk
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