The US election is just around the corner, and with it comes the potential for significant market fluctuations. While traditional markets may experience a pause during election night, the 24/7 nature of the cryptocurrency market means investors can track real-time price movements.
Cryptocurrency market data provider Kaiko highlights key metrics to keep an eye on during this crucial period.
Tick trades data
, which records every buy or sell order across all cryptocurrency markets, provides a granular view of market activity. This data can be particularly insightful, as seen during the September presidential debate.Another indicator to watch is
cumulative volume data (CVD)
. During the last debate, CVD offered valuable insights into market sentiment, and it’s expected to do so again during the election. Additionally,Bitcoin’s BTC/USD buying and selling activity on Coinbase
, the largest cryptocurrency exchange in the US, will offer a glimpse into how institutional investors are reacting to election results.Derivatives markets
can also provide valuable insights.Perpetual futures Open Interest (OI)
for Bitcoin and Ethereum (ETH/USD) can indicate the market’s leaning towards a bullish or bearish stance. For Bitcoin, the dollar-denominated OI recently reached record highs, suggesting a strong bullish sentiment leading up to the election.Funding rates
, which reflect the cost of borrowing and lending cryptocurrencies, are another important metric. While funding rates remained stable last week despite a surge in OI, this could indicate traders’ cautious approach ahead of the election.Implied volatility
, a forward-looking measure of volatility and risk used by options traders, is also a crucial metric to monitor. This metric can help anticipate future price swings.Geoffrey Kendrick
, head of crypto research at Standard Chartered, warns that Bitcoin’s price trajectory leading up to the election could be volatile. He anticipates pre-election profit-taking, potentially keeping Bitcoin’s price below $73,000. Kendrick also notes that options markets are pricing in increased volatility, similar to the period leading up to the launch of the first Bitcoin exchange-traded funds.As the US election unfolds, cryptocurrency investors should be prepared for potential market fluctuations. By monitoring key metrics and understanding the factors influencing market sentiment, investors can make informed decisions and navigate the volatility during this critical period.
