With the U.S. presidential election about to be decided on Tuesday, entering a position into any of the altcoins would probably be very risky right now. Is it a case of ‘fortune favours the brave’, or wait until certainty becomes more apparent?
For those who like to venture much further out along the risk curve than the majority, entering a position into this or that altcoin now could be the way to go. If Trump wins the election on Tuesday, Bitcoin and crypto will go to the moon - or will they?
A Trump win?
Let’s say, for example, Trump does win the election, there is likely to be a lot of volatility. Of course, a lot of this might well be to the upside, at least initially. But this could also be seen as a ‘sell the news event’. Market makers could be licking their lips at the opportunity to slam the price down as gung ho traders open up longs (potentially many with high leverage) as they anticipate a surge to the upside.
Markets are much more complex beasts, and if there is any opportunity to liquidate traders who are trading on optimism rather than carefully thought-out and hedged positions, the market is bound to take advantage of them.
A Harris win?
All this said, what about if Kamala Harris and the Democrats win the election? The polling is extremely tight, and things could go either way. If Harris does win, some analysts say that it wouldn’t really matter for crypto in the grand scheme of things. The spending after the election is likely to be even more rampant should the Dems win, and this would be an advantageous environment for crypto.
Nevertheless, the current Biden/Harris administration, along with an extremely crypto-negative SEC led by chairman Gary Gensler, have attacked crypto at every opportunity, and Operation Chokepoint looks to be a real thing.
Going forward, it could be argued that the banking lobby is likely to have a much more receptive ear from a democrat administration than a republican one, and given what is at stake, the bankers will probably not be looking favourably at crypto.
Altcoin trading is probably not a good idea … yet
Therefore, with all the aforementioned taken into account, getting into altcoins on the day before the U.S. election is probably not a good idea. Yes, Bitcoin and the altcoins do look as though they are ready to bounce, but such an important factor as a U.S. election has every chance to throw the most enormous spanner into the works.
Bitcoin, which is still the the guiding light for all the altcoins, registered a terrible weekly candle close for last week, and is currently still beneath the major $69,000 support/resistance level. If Bitcoin has problems, the altcoins are going to have them in spades.
Careful altcoin traders need to keep one eye on Bitcoin and one eye on a treacherously shifting market. Arguably the best place to be in crypto right now is in Bitcoin, or in stablecoins. Altcoin trading can be a lot more profitable, if or when Bitcoin finally breaks out definitively from this long period of sideways price action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
