A new report focuses on the short-term trajectory of bitcoin’s price, citing the US midterm elections as a key catalyst that could lead to a rally.
Conclusion
- Binance Research says Bitcoin price could rise after US midterm elections as political uncertainty eases.
- Historically, the S&P 500 has averaged about 19% in a year.
- Bitcoin also rallied after the previous medium-term periods, with an average gain of around 54%.
According to a March 11 report from Binance Research, Bitcoin (BTC) could see a strong move higher after the upcoming US midterm elections. The company said market history shows that both stocks and Bitcoin often rally after political uncertainty around an election subsides.
The data in the report shows that the S&P 500 gained an average of 19% in the 12 months following the midterm elections. The index has not posted a negative return during this window since 1939.
Bitcoin showed a similar trend, albeit with a much shorter data set. As the crypto market became more liquid around 2014, three medium-term bullish periods were followed by Bitcoin’s strong performance. On average, assets rose about 54% in the three years following the election.
Election cycles often bring market swings
According to the report, midterm election years are typically the most turbulent period of the four-year political cycle. Investors are often cautious as policy direction and economic priorities remain unclear.
Historically, the S&P 500 has averaged about 16% declines over the years. In many cases, market corrections occur before the vote, when uncertainty is high.
Bitcoin tended to follow a similar pattern, but with larger movements. Binance Research said that BTC has lost an average of about 56% over the past few years, reflecting the asset’s higher sensitivity to changes in risk sentiment.
When the election results are known, the environment usually changes. Investors gain greater clarity about fiscal policy and regulation, and capital often returns to riskier assets. The change helped fuel a strong rally a year after the midterm elections.
Macro risks still shape the price of Bitcoin
While the election cycle offers a longer-term outlook, the report notes that global events are currently driving markets.
Rising geopolitical tensions have fueled uncertainty in financial markets. Outages near the Strait of Hormuz, a key global oil shipping route, have already affected energy prices and investor sentiment.
Oil markets have been very volatile in recent days and Bitcoin has moved in line with broader macro assets. According to Binance Research, price action in BTC, crude oil and US stocks have followed similar patterns, although the crypto tends to show larger swings.
At the same time, the activity of American investors is increasing. Trading related to Bitcoin ETFs has increased over the past week, indicating renewed interest from traditional market participants.
However, ETF volume still represents a relatively small portion of overall Bitcoin trading. This difference suggests that there may be room for more institutional participation over time.
For now, the report describes the market as vulnerable, with macro risks still unresolved. However, past periods show that periods of uncertainty are often followed by strong opportunities for long-term investors, especially when the political cycle moves past the midterm elections.
