Bitcoin’s price dropped on Tuesday, retreating from recent three-month highs as growing risk aversion—fueled by anticipation of a tight U.S. presidential election—affected cryptocurrency markets.
Initial speculation about a potential Donald Trump victory had boosted crypto prices, but recent polls indicate a close race between Trump and Vice President Kamala Harris, which has dampened investor appetite. As broader risk-driven assets declined, sentiment towards crypto weakened.
Additionally, the strength of the dollar put further pressure on crypto prices, while increased demand for safe havens propelled gold to record highs.
Bitcoin fell 2.4% to $67,412.50 by 00:49 ET (04:49 GMT). The token had reached a peak of $69,000 but could not surpass the $70,000 mark, which was anticipated to signal a bullish trend.
Election uncertainty weighs on Bitcoin The largest cryptocurrency retreated from its recent highs amid rising uncertainty surrounding the U.S. elections, with just two weeks until voting day.
Trump’s improving odds had been a significant factor in the recent price increases, particularly as he has maintained a largely pro-crypto stance. Positive comments from Harris regarding potential crypto regulation had also supported market sentiment.
However, analysts now view the 2024 race as too close to predict, leading to broader uncertainty in risk-driven markets and encouraging traders to shift towards safe havens like gold and the dollar.
compared to Harris’s 36.4%. Prediction markets still favor a Trump victory, with Polymarket showing a 63.7% chance for Trump
Rate Uncertainty Weighs on Crypto Prices
Bitcoin and other risk-driven assets faced pressure from growing expectations that the Federal Reserve will slow the pace of interest rate cuts in the coming months.
This belief pushed the dollar to near three-month highs and lifted Treasury yields, further affecting speculative assets.
Traders are also factoring in a higher terminal rate for the Fed.
Crypto Update: Altcoins Reflect Bitcoin's Decline
The broader crypto market mirrored Bitcoin’s losses, with the second-largest cryptocurrency, Ether, dropping 3.5% to $2,642.39.
SOL, ADA, and MATIC saw declines ranging from 1.5% to 3%, while XRP fell by 0.9%.
Among meme tokens, DOGE decreased by 1.2%.
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