Bitcoin Breaks Out One Week Before U.S. Election - Where Does SOL Go From Here?

Will the U.S. Election pump crypto further, or is the landmark moment a sell-the-news event?

Published: Oct 29, 2024 at 17:49

The prophesized ‘Uptober’ finally arrived in earnest, with Bitcoin on the cusp of breaking its previous all-time high of $73,750. The world’s first cryptocurrency has been trading in a tight range since March 2024, following a bullish period punctuated by Bitcoin ETF listings in traditional markets.

Waves of euphoria are swelling in the crypto space, with traders anticipating next week’s U.S. Presidential Election to be a make-or-break moment for the markets.

Bitcoin sits on the verge of breaking all-time highs and the White House is potentially witnessing a change of administration, but where does Solana fit into all this?

Bitcoin Breaks $70,000 While Solana Flirts With Key Resistance

As ‘Uptober’ draws to a close, Bitcoin once again takes center stage. The industry’s biggest digital asset has reclaimed a key psychological level at $70,000, mere weeks after dipping below $60,000.

Bitcoin is often considered a rising tide that lifts all boats. As $BTC rises, crypto assets across the industry typically rise as market sentiment turns bullish and participants enter risk-on positions.

Spurred on by Bitcoin’s push to new all-time highs, Solana draws closer to key resistance levels of its own. After peaking at just over $200 in March, $SOL has since been rejected at around $185 three times, suggesting high levels of sell pressure at this price point.

However, fundamental outlooks and bullish Bitcoin headwinds might be enough to help $SOL secure this coveted level and push beyond the $200 price point.

TradingView data illustrates a key difference between Bitcoin’s price action during its previous all-time high in March when compared to current dynamics.

BTC price

In March, Bitcoin’s RSI (Relative Strength Index) suggested BTC was heavily overbought. Meanwhile, Bitcoin’s current RSI demonstrates neutral-to-bullish momentum for the asset, indicating that $BTC might still have room to run.

If Bitcoin breaks its all-time high, alternative cryptocurrencies like $SOL will likely follow as traders move liquidity to lower-cap coins in search of further upside.

SOL/BTC Pair 25% Away from ATH - What’s $SOL’s Ceiling?

Despite Solana’s meteoric price performance throughout 2024, $SOL is yet to ink new all-time highs against $BTC since the previous cycle.

SOL/BTC rpice

At the peak of the 2021 crypto bull run, $SOL briefly traded at 0.0046BTC on the SOL/BTC pair. Solana RSI suggests that, should crypto continue its bullish momentum throughout Q4, $SOL could return to SOL/BTC all-time highs, pricing $SOL at $330.

However, markets have a habit of humbling participants, particularly in the crypto space. Past price action is never any guarantee of future market dynamics and traders should always remember to manage their risk appropriately.

Is the U.S. Election a Sell-The-News Event?

The prospect of a change in the U.S. Government is sending waves of bullish sentiment through crypto markets.

Market participants widely believe that the Biden-Harris administration has been devastating for the crypto economy, with SEC Chair Gary Gensler taking a hard stance against the industry. Gensler’s time in office has been defined by several lawsuits against some of the biggest names in crypto, including Ripple and Binance.

In a bid to curry favor from the crypto community, ‘Crypto President’ Donald Trump has promised to nurture the emerging industry. Trump promises voters he would “end Biden’s war on crypto” and wants “all the remaining Bitcoin to be mined in the USA”, illustrating his profound understanding of Bitcoin distribution and value proposition.

While most crypto fans are hoping for a Trump victory, a Harris presidency might not be such a fatal blow to the industry. At a New York fundraising event in September, Harris asserted that her administration would “encourage innovative technologies like AI and digital assets”.

If elected, Harris could also move to replace Gary Gensler as SEC Chair with a more crypto-friendly official.

At press time, Solana traders appear to be expecting Trump’s return to office on November 5th. According to Drift Protocol’s BET prediction market, Trump has a 66% chance of winning the election.

drift odds

Markets are showing plenty of enthusiasm ahead of the U.S. Election, with some suggesting it could be a ‘sell-the-news’ event. Historical data suggests this hasn’t been the case, with previous elections typically kick-starting meteoric crypto bull runs.

However, correlation does not equal causation. Dramatic price surges following U.S. elections are more likely due to Bitcoin halving cycles, which typically precede bullish price movements every four years.