With the US election upon us, many traders wonder how the outcome of the election might affect the price of BTC and ETH.

Bitcoin managed to create a fresh 12-month high over the weekend as the coin breached the $14,000 level. It has since dropped slightly with the uncertainty that is heading our way over the next couple of days - but, overall, the market remains strongly bullish. 

It is pretty unclear how the market will react if Biden wins, but we can be pretty sure that the overall global economy will benefit from another Trump term in office. We only need to take a look at the S&P 500 chart to get a picture of what Trump has done for the US Economy;

The chart above shows the S&P 500 from 2010 onward. We can see that the market was already inside a bullish run throughout 2010-2015. However, when Trump took office in 2016, the market continued to surge much further higher. In fact, under Trump’s presidency, the American stock market has continuously made higher highs and is trading around 85% higher from the start of his time in office.

If Trump gets re-elected, we can expect the S&P 500 to continue to rally further higher - a good signal for the entire global economy and Bitcoin.

On the other hand, many analysts think that Bitcoin can go higher regardless of who wins the election. This is primarily due to the recent shift in sentiment toward Bitcoin amongst large corporations and financial institutions.

If you think back to the 2017 bull run when Bitcoin topped at $20,000, no corporation would touch the thing. Jamie Dimon, CEO of JP Morgan Chase, called it a fraud and warned anybody in his company from trading Bitcoin - even going as far as ridiculing his daughter for owning some. Well, it seems that he has changed his tune toward the digital currency after JP Morgan opened up their own cryptocurrency business called Onyx, making them the first global bank to enable deposit accounts on the blockchain ledger.

In addition to this, a slew of other corporations and financial institutions are racing to enter the cryptocurrency game. For example, PayPal recently announced that it would allow its users to buy and sell cryptocurrency on its platform. 

There are also a bunch of corporations that are buying up Bitcoin from their reserves. For example, Square, the payments giant owned by Jack Dorsey, announced that they had bought up $50 million worth of Bitcoin. Additionally, MicroStrategy has increased its holdings in Bitcoin to a mega $425 million!

It seems that these corporations are buying up Bitcoin as a means to hedge against inflation. 

As you all know, the entire world is currently in the middle of a global pandemic. COVID-19 has reached the four corners of the globe, causing nationwide lockdowns leading to economic fragility. As a result of this fragility, central banks worldwide have been printing money to help keep the economy ticking over.

Printing money is quite harmful to the US Dollar, and it leads to inflation. The following chart shows how money printing has increased over the past 25 years;

The chart shows that fiscal stimulus started during the 2008 financial collapse and continued slowly over the following few years. Around 2017, the money printing started to drop off slowly, but the COVID-19 pandemic has caused the stimulus to increase significantly to fresh all-time highs. In fact, the US Federal Reserve printed more money in June 2020 than in the first two centuries after it was founded!

The printing of additional US Dollars leads to inflation and causes the USD in your pocket to lose value. As a result, any company holding USD is facing negative returns on their cash reserves. This is likely the biggest reason why so many corporations are starting to shift some of their reserves into BTC to avoid these negative returns.

With that being said, economic analysts in the US are expecting another large fiscal stimulus package. Talks are already underway for this stimulus, and it was hoped to arrive before the election itself. Unfortunately, this could not come to fruition, but the stimulus package is still on the cards.

Trump stated that he would pass a massive stimulus package after the election;

This is indeed great news for Bitcoin as more printing will lead to more inflation, which, in turn, should lead to more people buying BTC. At the same time, there is a worry that, if he loses, he could sabotage this fiscal stimulus by not signing the bill until he leaves office in January 2020.

At the end of the day, with the world battling to remain above water during this pandemic, it seems that the outcome of the election should not have too much of an effect on the price of Bitcoin and Ethereum directly. But, if Trump does win, we can expect the market to continue to rise higher. 

Let us take a quick look at the markets and highlight some support and resistance areas moving forward.

Bitcoin Price Analysis

BTC/USD - DAILY CHART - 

What Has Been Going On?

Taking a look at the daily chart above, we can see the epic bull run that BTC saw during October when the coin broke above a symmetrical triangle pattern at the start of the month and went on to surge by a total of 36% in October from low to high. The coin topped out at around $14,100 before the bull run stalled slightly. 

More specifically, Bitcoin was never able to break the resistance at $13,835 (1.272 Fib Extension) and rolled over from here.

So far in November, Bitcoin has remained supported at the $13,222 level and has rebounded higher from here to trade at $13,700 ahead of the election.

Are We Bullish Or Bearish?

We are most undoubtedly bullish right now. The coin would need to drop beneath $12,000 to turn neutral, and it would have to sink beneath the support at $10,170 before being in danger of turning bearish.

Where Can We Go From Here?

If the election outcome causes a push higher, the first level of resistance to overcome lies at $12,835 (1.272 Fib Extension). Above this, resistance then lies at $14,000, $14,100, and $14,135.

If the buyers continue to climb higher, resistance then lies at $14,320, $14,500, $14,570, $14,875, and $15,000. Beyond $15,000, the bulls will need to contest resistance at $15,315, $13,500, $15,638, and $16,000.

On the other side, if the sellers start to push lower after the election, the first level of support lies at $12,332. Beneath this, support is found at $13,000 (.382 Fib Retracement), $12,850, $12,600 (July 2019 High-Day Close), $12,311 (.618 Fib), and $12,000.

Ethereum Price Analysis

ETH/USD - DAILY CHART - 

What Has Been Going On?

Ethereum is in a slightly different boat to Bitcoin. The coin had reached its 2020 peak earlier in the year at the start of September when it reached the resistance at $475. This push higher was driven mainly by the entire DeFi summer boom in which DeFi protocols were attracting billions of TVL to be locked inside of their protocols. All of these protocols are run on top of Ethereum, which helped boost the price higher.

Since reaching the 2020 highs, Ethereum headed lower and reached as low as $315 toward the end of September. The coin managed to rebound higher from there as it started to trend upward in October. It penetrated the upper boundary of a symmetrical triangle pattern at the start of the month and began to surge higher. It continued to climb until resistance was met toward the end of October at the $415 level - provided by a bearish .618 Fib Retracement level.

Ethereum has since dropped lower from this resistance as it now struggles to break above a falling trend line as it trades around $380.

Are We Bullish Or Bearish?

Right now, the market can be considered neutral. The cryptocurrency would have to break beyond $415 to start to turn bullish again in the short term. On the other side, Ethereum would need to drop beneath the September lows at $315 to be in danger of turning bearish.

Where Can We Go From Here?

This all depends on how Ethreum reacts against BTC itself. The coin is trading at 3-month-lows against BTC and must rebound (or at least move sideways) to be able to take advantage of any push higher in Bitcoin. 

If Ethereum does rebound against Bitcoin, and Bitcoin travels higher against the USD, the first level of resistance to break lies at the short term falling trend line (around $390). This is followed by resistance at the $400, $415 (bearish .618 Fib Retracement), and $421 (October Highs).

Above this, additional resistance is found at $430 (1.414 Fib Extension), $442 (bearish .786 Fib Retraceement), $450, and $460.

On the other side, if the sellers break the support at $380, the first travel of support beneath is expected at $367 (.618 Fib Retracement). Beneath this, support lies at $360 (100-days EMA), $250 (.5 Fib Retracement), $340, $320, and $315 (200-days EMA).

Added support is then found at $300, $280, and $250.