Crypto Plummets, Why Next Rally May Takes As Long As November?

Nidhish Shanker
September 19, 2022
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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The crypto market is in a major rut due to macroeconomic conditions. The Federal Reserve is engaging in quantitative tightening to curb the soaring inflation. However, experts reveal why the months of November and beyond after the midterms can bring some relief to the crypto market.

Major stock market influencer and trader, @CanteringClark, shared data on Twitter, highlighting the performance of the stock market before and after the midterm elections. The US midterm elections will be held on the 8th of November, 2022.

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How Midterms Affect Crypto Prices

According to data, the stock market generally performs poorly in the months leading up to the midterm elections. On the other hand, the stocks almost always skyrocket in the months following the elections. No matter the performance of the president’s party, the months after the election almost always outperform the months before.

According to Clark, this is especially true in the 1970s decade. Experts believe that the 70s decade had loosely similar macroeconomic conditions to the present day. In the 12 months leading up to the elections, the markets fell by 13% in 1966, 15% in 1970, and 32% in 1974. However, the market bounced back by 17%, 13%, and 20% respectively in the 12 months after the election.

According to Clark, the year 1974 has significant similarities to the current macroeconomic conditions. The inflation level hit 8.8% during the same period. As a result, the stock market fell close to 32%. However, the markets made a strong recovery of 20% after the election.

Clark notes that the current market behavior is on par with the other years in terms of total volume realized. Therefore, November and December will likely be good months for the market.

The crypto market is strongly correlated with the general market since 2020. Crypto assets behave similarly to tech stocks and the tech-oriented NASDAQ.  Therefore, the months after the midterms may give something to cheer for the bulls.

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Can The Fed Be An Obstacle

A survey by Bloomberg reveals that economists believe that the Fed will remain hawkish well into the year 2023. Therefore, the Fed’s quantitative tightening can ruin the historical trend this year.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Nidhish is a technology enthusiast, whose aim is to find elegant technical solutions to solve some of society's biggest issues. He is a firm believer of decentralization and wants to work on the mainstream adoption of Blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.