The price of Bitcoin (BTC) crashed shortly after the midterm elections in the US 2014 and 2018. However, while the price action is the same, the reading indicators suggest otherwise.
The 2014 and 2018 US midterm elections were held on November 4 and November 6, respectively (black vertical lines). It is interesting to note that the crypto market fell sharply after the end of these elections.
For 2022, the midterm elections will take place on November 8 (white line), under the presidency of Joe Biden.
Here we look at the similarities as well as the differences between the evolution of the price of Bitcoin (BTC) and the total crypto market capitalization (TOTALCAP) in the last and current elections.
BTC price comparisons
The main striking similarity when looking at Bitcoin’s price action is the time between the asset’s all-time high and the election. In fact, 350 days until the summit after the 2014 election and 336 days after the 2018.
In 2014 as in 2018, the price of Bitcoin crashed the week after the election. Its fall continued for about a month and showed a magnitude of 58% and 51% respectively. Within the current range, a 50% decline would bring BTC back to $10,400.
Very different ROI
While the price action between these periods has been similar, the movement of the RSI has not. In 2014 and 2018, the indicator only fell below 40 after the election. After that, its respective lows were 35 and 37.
During the current cycle, the RSI moved well below 40. Its trough at 34 in June 2022 (red arrow) was the lowest on record.
Additionally, the RSI has started to form a bullish divergence (green line). This is a sign related to changes in trends.
So, unlike the price action, the data from the technical indicators show that the movement of Bitcoin after the midterm elections is different in 2014 and 2018.
Crypto Market Cap Gives Bullish Reading For Elections
The total market capitalization of cypto presents a relatively bullish outlook.
First, its price showed a double dip pattern, which is considered a bullish pattern. Both of these holes have long bottom threads (green arrows).
The weekly RSI then developed a bullish divergence (green line).
Finally, this same weekly RSI is on course to break above its bearish divergence trendline (black line).
Although it has yet to break through as of late, it is important to note that the market cap price is still far from its own resistance line. Therefore, its growth would be equivalent to an upward movement of around 24%.
So it seems more likely that after the mid-term elections, a price rally will occur rather than a fall.
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