On today’s US Election Day, an important trend has emerged in the cryptocurrency market: the daily inflow of Bitcoin to centralized exchanges has decreased, which could indicate lower selling pressure, according to the analytics firm.
According to a recent analysis by CryptoQuant, the volume of BTC entering exchanges is significantly lower compared to previous election cycles.
“Today, Bitcoin inflows to exchanges are down significantly compared to both the last presidential election and early 2024,” CryptoQuant Research Director Julio Moreno said in an interview. “Daily inflows currently hover around 45,000 BTC, which is in stark contrast to the 2024 peak of 95,000 BTC seen in March and the 73,000 BTC seen just before the 2020 election.”
The analysis also noted that Bitcoin’s relative strength compared to altcoins like Ethereum reflects a shift in investor sentiment. “Bitcoin has outperformed most altcoins, suggesting that investors are focusing on Bitcoin specifically, rather than a broader spread across cryptocurrencies,” Moreno said. This trend has contributed to Bitcoin’s increasing market dominance, which currently exceeds 60%, according to TradingView data.
In addition, short-term wallets appear to be accumulating Bitcoin ahead of the election. Data from CryptoQuant reveals that since early October, this group’s holdings have increased by 343,000 BTC, reaching a total of 4.25 million BTC. Moreno noted that this accumulation indicates a revival of interest in the leading BTC among short-term investors.
Bitcoin’s current valuation also suggests stability. Currently priced above $69,000, Bitcoin is trading close to its realized price, which is the average purchase price of all holders. This closeness to its realized price suggests that Bitcoin is fairly valued, a position it has historically held in past US election cycles. In both 2016 and 2020, BTC has remained close to its realized price, a pattern consistent with the current market situation.
CryptoQuant’s report also highlights BTC’s strong post-election performance in past cycles. Data shows that Bitcoin gained 37% following the 2016 election, 98% in 2020, and 22% from Election Day to the end of the year in 2012. Analysts note that Bitcoin’s behavior in 2024 has thus far closely mirrored the 2016 trend, suggesting the potential for a similar post-election rally if the right conditions arise.
Despite recent market corrections attributed to profit-taking following a 20% price rally, CryptoQuant analysts argue that fundamentals for BTC remain positive. These corrections have not dampened overall sentiment, and with selling pressure easing, the stage could be set for continued stability or growth post-election.
*This is not investment advice.