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Cryptos Crashed After the Last US Midterms – So What Can We Expect from the 2022 Elections?

2 mins
Updated by Geraint Price
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In Brief

  • The US midterm elections will be held on Nov. 8
  • The Bitcoin price crashed after the 2014 and 2018 US elections.
  • The Crypto market cap has created a double bottom pattern.
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The Bitcoin (BTC) price crashed shortly after the 2014 and 2018 U.S. midterm elections. While the price action is similar, indicator readings suggest the same will not happen this time.

The 2014 and 2018 U.S. midterm elections were held on Nov. 4 and Nov. 6, respectively (black vertical lines). Interestingly, the crypto market crashed sharply right after the elections were done. 

The 2022 midterm election night will be on Nov. 8 (white) line. They will be held under President Joe Biden.

Here we look at the similarities and differences between Bitcoin (BTC) and total crypto market capitalization (TOTALCAP) price movement between the previous and current elections.

Bitcoin Price Action Shows Similarities

The main similarity when looking at the Bitcoin price movement is the time from the all-time high until the elections. More specifically, there were 350 days after the 2014 and 336 days after the 2018 elections.

In both 2014 and 2018, the Bitcoin price crashed the week after the elections. The crash continued for roughly a month and had a magnitude of 58 and 51%, respectively. In the current movement, a decrease of 50% would take the BTC price to $10,400.

Bitcoin (BTC) Price Election
BTC/USDT Chart By TradingView

RSI Movement is Completely Different 

While the price action between these periods is similar, the RSI movement is not. In 2014 and 2018, the RSI did not decrease below 40 until after the elections. Afterward, the bottom was reached at 35 and 37, respectively. 

In the current cycle, the RSI has decreased well below 40. The June 2022 RSI bottom (red icon) of 34 is the lowest ever recorded.

Moreover, the RSI has already begun to generate bullish divergence (green line). This is a sign associated with bullish trend reversals.

So, unlike the price action, technical indicator readings indicate that the price movement after the midterm elections will be dissimilar to 2014 and 2018, meaning a crash is unlikely.

Bitcoin (BTC) RSI Movement
BTC/USDT Chart By TradingView

Cryptocurrency Market Cap Gives Bullish Reading For Midterms

The cryptocurrency market cap gives a relatively bullish outlook. 

Firstly, it shows a double bottom, considered a bullish pattern. Both bottoms had long lower wicks (green icons). 

Secondly, the weekly RSI has generated bullish divergence (green line). 

Finally, the weekly RSI is in the process of breaking out from its bearish divergence trend line (black). 

While this has yet to occur, it is worth mentioning that the market cap is still far away from its own resistance line. So, an increase to it would amount to a nearly 24% upward movement.

As a result, it seems more likely that a rally will follow the midterm elections rather than a breakdown.

Crypto market cap decrease
TOTALCAP Chart By TradingView

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer: BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)