Bitcoin opened the week around $68,000, riding on the strength from last week’s rally, and closed just under $70,000 at $69,730, posting a weekly gain of 3.63%. Intra-week action was lively, with bitcoin hitting a high of $73,600, just $200 shy of the mid-March peak of $73,800.

One factor potentially impacting bitcoin’s failure to reach a new all-time high could be U.S. election dynamics. The odds of Kamala Harris winning the presidency rose, while Donald Trump’s declined from 64% at bitcoin’s weekly high to 59% by week’s end.

This five-point drop in Trump’s odds may have prompted traders to sell off positions later in the week,, speculating that a Harris presidency would bring increased regulatory scrutiny to crypto markets and lower the chance of a bitcoin strategic reserve bill passing.

Bitcoin October Monthly Close Analysis

Looking at bitcoin on the monthly timeframe, the asset fell about $1,000 short of surpassing its all-time high monthly close of $71,280 set in March. Despite this, the monthly outlook remains positive, with hidden bearish divergence appearing on the Fischer transformation indicator. This suggests a temporary slowdown in momentum, but the overall trend appears poised to continue upward.

Bitcoin Dominance Continues To Climb

Bitcoin dominance has also been climbing. The BTC dominance metric (BTC.D) now sits above 60% on the weekly timeframe, signaling a shift in capital flow from altcoins back into bitcoin. This movement supports a bullish outlook for bitcoin, as the dominance level reaches heights last observed in mid- to late-2020.

Funding Rates Hit Elevated Levels

This past week, as bitcoin flirted with its all-time highs, funding rates across exchanges surged to levels not seen since June, when bitcoin was similarly trading in the $70,000 range. At one point, aggregate funding rates peaked at 0.015% over an eight-hour period, meaning traders paid 0.045% interest on long positions per day. For a trader holding a $1 million position, this would mean daily costs of $450, or approximately $13,500 monthly and $164,250 annually if rates remain constant. These elevated costs can deter traders from holding long positions, often leading to bearish price action as traders close positions to avoid mounting funding fees.

ETF Flows Soar To Record Highs

This week also saw bitcoin spot ETFs hit record levels, with total net assets reaching nearly $70 billion, closing at $69.64 billion. On Wednesday, total assets peaked at $72.46 billion, with over $900 million in inflows, marking the second-highest day for inflows since spot ETFs were launched.

The largest inflows came from BlackRock’s IBIT fund, which saw $872 million in a single day, while Fidelity’s FBTC fund experienced the highest outflows, with over $75 million withdrawn by investors.

Looking Ahead to Election-Driven Volatility

As the election draws near, traders and investors may see subdued price action while awaiting results. With polling data near a 50/50 split and prediction markets narrowing, volatility is likely to spike post-election.

While the short-term direction remains uncertain, the election outcome could have long-term bullish implications for bitcoin’s ecosystem, especially if the Republicans win, as they have established themselves as the pro-crypto party.

‍