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Bitcoin's volatility, which measures how much its price might swing, seems to be on pause as traders hold their breath for the results of the U.S. election. Bitfinex analysts think this might just be the “calm before the storm.”

In their Nov. 5 market report, aptly titled “Calm Before the Storm?” Bitfinex shared that implied volatility for Bitcoin options is sitting in the low 40s. This points to a market that’s not exactly betting on any big price moves—at least for now.

Bitcoin's volatility index, a measure of its expected price fluctuations provided by crypto derivatives exchange Deribit, reached a three-month high of 65.7 on November 3. Since then, it has slightly decreased to 63.2. 

Additionally, data from CoinGlass indicates a significant drop in Bitcoin's open interest, as traders have been closing substantial volumes of both short and long positions ahead of the U.S. election. 

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Bitcoin Open Interest. Source: CoinGlass

Traders Are Cautious

As the U.S. presidential election approaches on November 5, many traders are adopting a cautious stance, awaiting the outcome before making significant moves. Bitfinex analysts note that, despite expectations for increased volatility, market participants are largely in a "wait-and-see" mode. 

However, the Bitfinex report anticipates a substantial spike in volatility immediately following the election results. This surge could lead to significant price movements. Conversely, if the expected volatility doesn't occur, it might signal a potential deeper correction for Bitcoin in the near term. 

This perspective aligns with broader market sentiments. Some traders predict that Bitcoin's price could swing by at least 10% in either direction once the election outcome is clear.

Altcoin Enthusiasm Wanes Amid Market Stagnation

Bitcoin’s dominance hit a “new cycle high” of over 60% on Oct. 29, showing that market attention is laser-focused on BTC as the U.S. election looms. Bitfinex analysts pointed out that there’s a noticeable “apathy” toward altcoins at the moment.

A report noted that altcoins are taking a hard hit whenever Bitcoin pulls back. Ether (ETH) and Solana (SOL) have both dropped around 12% from their recent highs, and ETH is now down 40% from its earlier ETF-driven rally.

“The speculative interest that once fueled altcoins has pretty much dried up,” said Bitfinex analysts. “This is seen in stable funding rates and a generally subdued market mood. With BTC soaking up most of the capital flow into crypto, altcoins are having a hard time keeping pace. Without a new catalyst, their short-term outlook isn’t too promising.”

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