Bitcoin’s July Low Challenges Its Historical Midterm Election Pattern
Bitcoin’s past bear-market bottoms have generally appeared in the months following U.S. midterm elections. This year, however, the cryptocurrency’s recovery from its July low suggests the market may have bottomed much earlier than previous cycles indicate.
The Nov. 3 U.S. midterm elections are now just 10 days away, bringing renewed attention to Bitcoin’s historical price behavior during election years. Although earlier cycles showed a tendency for major lows to form after midterms, the current market trajectory presents a different picture.
Bitcoin Has Recovered 40% From Its July Low
Bitcoin recorded major cycle bottoms in January 2015, December 2018 and November 2022. Each low occurred after the previous U.S. midterm election, arriving approximately 71, 38 and 13 days after election day, respectively.
In contrast, Bitcoin’s lowest price this year was recorded on July 1, when it fell to $57,850. That was roughly 125 days before the upcoming election.
By Oct. 22, BTC had climbed to approximately $81,455, marking a recovery of about 40% from its July low. The rebound raises the possibility that the current cycle bottom formed well ahead of the historical timeframe.
Previous election cycles also featured substantial declines before voters went to the polls. Bitcoin lost around 29% in the six months before the 2018 midterms and approximately 37% ahead of the 2022 election.
QQQ’s Performance Around Midterms Is Inconsistent
U.S. technology stocks have also shown weakness during some midterm periods, although the trend has not been uniform.
The Invesco QQQ Trust fell approximately 23% between the end of September and its December 2018 low, with a significant portion of the decline occurring after election day. Ahead of the 2022 midterms, the fund dropped 17% over three months.
The 2014 cycle offered a contrasting example: QQQ advanced 17% during the six months before that year’s midterm election. The differing outcomes suggest that midterm elections do not produce a consistent direction for financial markets.
Bitcoin Maintains a Stronger Three-Month Gain
Over the past 30 days, Bitcoin and QQQ have both declined by roughly 6%. Looking at the past 90 days, however, Bitcoin has gained 26%, compared with a 3% increase for QQQ.
The technology-focused fund has retreated after reaching a record high of $762.86 on Oct. 6.
Taken together, the data suggests that Bitcoin’s historical midterm-year weakness may be more closely linked to its broader market cycle than to election timing. With BTC already recovering significantly from its July low, the current cycle may not follow the pattern seen in earlier midterm years.
