Bitcoin Traders Brace for Volatility in U.S. Election Week, CME Options Reveal

As the U.S. presidential election approaches, Bitcoin traders are bracing for potential price drops and increased volatility, with CME options data indicating a cautious yet bullish outlook. In this article, we will analyze the current Bitcoin market dynamics, traders' positioning in CME options, and the historical trends that influence their expectations during election weeks.


Bitcoin's price witnessed an 8% correction between October 29 and November 3, briefly dropping to $67,446 over the weekend. While the higher time frame (HTF) market structure remains bullish, traders anticipate a volatile trading session heading into the U.S. presidential election results on November 5. The chart below shows Bitcoin's recent price action and key support levels.


CME options data reveals a slight increase in put options, indicating a degree of uncertainty among traders. However, the overall trend remains bullish, with call options outnumbering puts by a significant margin. This suggests that traders expect Bitcoin's price to remain stable or rise, despite the potential volatility surrounding the election.

Historical trends show that Bitcoin's price often experiences a notable dip around two to three months before U.S. presidential elections. In 2016 and 2020, Bitcoin saw significant declines of 30% and 16% respectively, before the elections. However, post-election, Bitcoin consistently rallied, surging over 200% and 320% respectively in the following months. This pattern, coupled with market uncertainty and correlation with traditional markets, influences traders' decisions and market sentiments.

Regulatory uncertainties and geopolitical risks have historically impacted Bitcoin's trading volumes and price volatility during U.S. elections. In the lead-up to the 2024 election, Bitcoin experienced an 8% correction, with analysts anticipating volatility before and after the election results. The U.S. presidential election is a key event for Bitcoin's price outlook, with traders expecting a pullback ahead of the election due to increased uncertainty.

Bitcoin's correlation with traditional markets and other cryptocurrencies has been a topic of interest for traders, especially during periods of high volatility like the U.S. election week. According to data from Skew, an onchain analyst, Bitcoin's market witnessed "persistent demand" around $65,000-$66,000 during its recent bullish rally, which pushed prices above $70,000 at the end of October. This area of support could potentially lead to a V-pattern reversal after the commencement of US election results.

In conclusion, Bitcoin traders are displaying cautious optimism ahead of the U.S. presidential election, with CME options data revealing a slight increase in put options, indicating a degree of uncertainty. However, the overall trend remains bullish, with call options outnumbering puts by a significant margin. Traders expect Bitcoin's price to remain stable or rise, despite the potential volatility surrounding the election. Historical trends and market dynamics suggest that Bitcoin could experience a pullback ahead of the election, followed by a potential rally post-election. As always, investors should stay informed and monitor market developments closely to make well-informed decisions.