All eyes are on elections in the U.S. as the crypto market trades sideways

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(Kitco News) – Cryptocurrencies traded flat on Monday as all eyes were focused on tomorrow’s midterm elections in the United States. The results will determine if President Joe Biden will have a supportive legislature or be relegated to lame-duck status for the next two years of his first term in office.

The stock market managed to see some gains ahead of the elections as traders looked to recoup the losses experienced at the end of last week, with the S&P, Dow and Nasdaq all managing to close the day in the green, up 0.96%, 1.31%, and 0.85%, respectively.

Data from TradingView shows that Bitcoin (BTC) bulls had to recover from an early morning onslaught by bears that dropped the top crypto to a daily low of $20,590 before staging a recovery back above support at $20,700, where the battle for control is now taking place.

BTC/USD 4-hour chart. Source: TradingView

Despite the weakness seen on Monday, Bitcoin price remained “in an uptrend on the daily bar chart after hitting a nearly two-month high last Friday,” according to Kitco senior technical analyst Jim Wyckoff, who advised that “bulls have the near-term technical advantage and are continuing to fight to keep the price uptrend alive.”

The ability for BTC to maintain its uptrend was likely influenced by last weeks Federal Open Market Committee meeting, according to Ben McMillan, CIO at IDX Digital Asset, who noted that clearer messaging from the Fed helped to remove some uncertainty from the market.

“The latest FOMC meeting and comments caused the markets to re-adjust the expectations around the terminal rate but in doing so, removed some uncertainty. As we’ve expected, this looks like it’s showing up as an early risk-appetite bid for crypto,” McMillan said.

As far as what to expect around the midterms, the CIO noted that “Historically, risk markets have been virtually flat until after midterms where there’s been a rally. While this year is obviously more of the exception than the rule, we wouldn’t be surprised to see something similar.”

Looking ahead to the CPI report

While news headlines are focused on the midterms, the results are unlikely to affect the crypto market much, according to independent crypto analyst Michaël van de Poppe, who instead pointed to another event occurring later this week that may have an outsized impact.

Big week coming week with the Midterms coming up. Probably not going to move markets that much, but CPI at the end of the week will.

Volatility a lot.

Will be in the mountains, so that’s going to be fun to watch markets in between haha.

— Michaël van de Poppe (@CryptoMichNL) November 6, 2022

And for those who have grown weary of the sideways price action over the last six months, pseudonymous crypto analyst Rekt Capital posted the following tweet highlighting the historical performance of BTC.

History suggests #BTC has only a handful of months left in this Bear Market$BTC #Crypto #Bitcoin

— Rekt Capital (@rektcapital) November 7, 2022

Altcoins trend down ahead of the election

The altcoin market saw widespread weakness ahead of the midterms, with the vast majority of tokens in the top 200 trading in the red for the day as traders wait on the sidelines.

Daily cryptocurrency market performance. Source: Coin360

Notable gainers on the day include a 12.75% increase for Livepeer (LPT) and a pair of 7.7% gains for Chainlink (LINK) and COTI (COTI).

The overall cryptocurrency market cap now stands at $1.038 trillion, and Bitcoin’s dominance rate is 38.5%.