These 3 Factors Could Shape Bitcoin’s Post-Midterm Performance

Bitcoin is nearing the US midterm election window, with past performances around that period holding it in good stead, but analysts at XWIN Japan have warned that past gains don’t necessarily mean we will see another rally.

Their analysis suggests a narrow test for BTC, especially if ETF buying continues, Treasury yields cool, and regulatory uncertainty clears up after the vote.

What the Midterm Record Shows

XWIN Japan stated that the S&P 500 had appreciated in all 19 12-month periods following US midterm elections held since 1950, with an average appreciation rate of 15.4%. Moreover, Bitcoin has gone up by 24.5%, 44.9% and 92.3% in the 12 months following the 2014, 2018 and 2022 midterms, respectively.

But there is a catch. BTC fell 45.5% in the first month after the 2018 election, leaving just three historical observations for Bitcoin. XWIN Japan therefore cautioned that “three observations cannot establish a reliable rule.”

Reduced political uncertainty may help risk-taking, but the election itself does not establish a cause for higher crypto prices.

“After the election, watch whether yields stabilize, buying persists and regulation advances,” XWIN wrote. “Political relief could help BTC, but sustained gains still require supportive market conditions.”

However, the analysts were quick to point out that while history offers context, it does not give guarantees.

Bitcoin is now around $86,000 on CoinGecko, little changed over 24 hours, up about 3% over seven days, and almost 8% across one month, although it has lost 31% of its value from a year ago, and remains nearly 32% below its $126,000 record.

How Analysts See the Road to Year-End

The OG cryptocurrency closed the third quarter up 43% after starting it under $58,000, its lowest level in a year and a half. Iliya Kalchev, an analyst at Nexo Dispatch, credits the bond market for that change in fortune, noting that the US Treasury enlarged its long-end bond buybacks in August and that spot ETF flows turned positive soon after.

And with the midterms due in the fourth quarter, Bitcoin has ended that period higher in nine of the past 15 years, although the median gain is only about 9%.

Lacie Zhang, research analyst at Bitget Wallet, still expects the Federal Reserve to raise rates by 25 basis points on October 28, which could affect the state Bitcoin will be in when Americans go to the ballot barely a week after.

She also sees $87,500 as the main hurdle for BTC, with a break above raising the odds of a short squeeze, while losing $82,000 to $82,500 support could open a move below $80,000.