Crypto markets rise in Trump victory expectations

Bitcoin price rose above the key $70,000 level on Tuesday. If the BTC price declines, support can be found at $65,000, while resistance may be encountered at the all-time high of $73,800. 

Ethereum price also gained strength on Tuesday, rising to $2,450. If Ethereum's price declines, it may encounter support near $2,300, while if it increases, resistance may be encountered near $2,760.

Fluctuating risk sentiment is causing volatility in crypto markets. US voters headed to the polls on Tuesday to vote in the US Presidential and Congressional elections. The results of the elections, however, will likely not be known for some time, as polls show a tight race between Trump and Harris. High market volatility is expected if the party that wins the presidential elections also gains control of Congress.

Crypto markets have been gaining strength on rising expectations that Donald Trump will win the Presidential elections. Trump’s proposed tariffs and tax policies will support economic growth, boosting high-risk assets such as cryptocurrencies. In addition, Trump has openly declared his support of crypto markets, announcing that he will make the US ‘the crypto capital of the planet’. 

Cryptocurrency prices are affected by central banks’ interest rates. High interest rates are restricting economic growth, putting pressure on risk assets, while the promise of rate cuts boosts crypto markets. The US Federal Reserve performed a drastic rate cut of 50 basis points in September, bringing its interest rate down to a target range of 4.75% to 5.00%. 

The US Federal Reserve will announce its interest rate decision on November 7th and is expected to lower interest rates by 25 basis points this week. Market participants will focus on Fed Chair Jerome Powell’s press conference after the meeting for hints on the Fed’s rate outlook.

Concerns of a broadening conflict in the Middle East are promoting a risk aversion sentiment, lowering the appeal of high-risk assets such as cryptocurrencies. The conflict between Israel and Hamas continues to escalate, putting pressure on risk assets such as cryptocurrencies. 

In the past few weeks, markets had been bracing for Israel’s retaliatory attack against Iran. Israel’s attack over the weekend, however, did not inflict substantial damage. The Iranian government announced that there would be an appropriate response to Israel’s attack, but Iran’s President emphasized that they do not seek a war with Israel. On Thursday, however, a report stating that Iran plans an attack against Israel in the coming days from Iraqi soil, put pressure on crypto markets. In addition, Iran’s Supreme Leader Ayatollah Ali Khamenei threatened Israel with a crushing response on Saturday, which is likely to cause risk sentiment to sour. 

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Written by:
Myrsini Giannouli

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