Bitcoin (BTC) faces the risk of falling below its current level of $60,000 in the coming hours due to escalating geopolitical tensions in the Middle East.
Analysts at British multinational bank Standard Chartered said in a note accessed by The Block that the chances of BTC declining further are high; however, investors should consider the fall as an opportunity to increase their digital asset holdings.
BTC to Fall Below $60K
Bitcoin already lost almost $4,000, falling from $64,000 to just above $60,000, following Iran’s missile strike on Israel on the first day of the month. The cryptocurrency has remained between $60,000 and $62,000 since then and was worth $60,500 at the time of writing.
According to the report led by Standard Chartered’s global head of digital assets research, Geoff Kendrick, bitcoin’s eventual plunge could result in higher returns for investors because the U.S. Republican presidential candidate, Donald Trump, currently has a higher chance of winning the upcoming elections.
Due to Trump’s pro-crypto stance, analysts expect BTC to experience a significant rally if he emerges victorious in the elections. Contrarily, the asset is likely to fall if the Democratic candidate Kamala Harris wins.
“A Harris victory would likely trigger an initial price decline, but we would expect investors to buy the dips as the market recognizes that progress on the regulatory front will still be forthcoming,” Kendrick stated.
BTC Call Options Are Increasing
Data on the decentralized prediction platform Polymarket shows that Trump’s chances of winning the election have increased by 1%, while Harris’ have reduced by the same percentage.
“This creates an interesting circularity for bitcoin. Geopolitical concerns may push prices lower, yet these very concerns seem to increase Trump’s odds, potentially improving bitcoin’s post-election outlook,” the analyst added.
While the effect of tensions in the Middle East continues to play out in the market, bitcoin call options are witnessing a growing demand. Call options are contracts that allow investors to buy assets at agreed prices on or before a particular date.
Over the two days, bitcoin call options open interest for the December 27 expiry at an $80,000 strike price has increased by 1,300 BTC on the leading crypto options exchange Deribit. The rising BTC call options indicate that market participants are betting on upward price movements, and according to Kendrick, this can intensify optimism for the asset.
