Crypto Week: Harris Lead Puts Pressure on Cryptos

Bitcoin (BTC) is showing a strong rebound, gaining 3.1% to reach $60,865, effectively erasing the 5.0% losses experienced on Sunday and Monday when the coin dipped to $57,613. This swift recovery highlights Bitcoin's volatility and potential for rapid gains.

In the U.S. presidential race, Vice President Kamala Harris is gaining a lead over former President Donald Trump, according to various polls. Platforms like Polymarket show Harris’s “Yes” shares trading at $0.52 compared to Trump’s $0.45, and Predictit gives Harris a 59% chance of winning versus Trump’s 41%. This marks the largest gap favoring Harris since her nomination.

The cryptocurrency market reacted to political developments, particularly with Trump’s recent silence on crypto during his interview with Elon Musk on platform X. In contrast, his son Eric Trump made headlines with a tweet expressing his enthusiasm for crypto and DeFi, which was interpreted by some as a potential announcement of his own token. This led to a brief surge in the "Restore the Republic" (RTR) token on the Solana blockchain, which gained 120.0% in value before plummeting by 82% after Eric Trump clarified that neither he nor his father were involved with the token.

Defunct crypto exchange Mt.Gox showed some more signs of activity on August 13, when a test transaction was made from the wallet where the exchanged earlier has transferred 33,100 BTC $2 billion worth. This was seen as progress towards distributing funds to creditors, which could potentially lead to a sell-off. However, CoinGlass data suggests that BTC allocations on exchanges have reached record lows, indicating that investors are currently inclined to hold rather than sell, which is a positive sign for the market.

Supporting Bitcoin’s recent rise, U.S. producer prices for July showed a decline to 2.2% YoY from 2.7%, boosting BTC by 4.4% to $61,540. However, Bitcoin has struggled to break through the $60,000-62,000 resistance level. The upcoming release of U.S. consumer price data for July could provide the necessary momentum; if consumer prices slow down significantly, BTC might have another attempt to climb above $62,000.

Despite this potential, large investors have been cautious. The largest spot BTC-ETFs (IBIT, FBTC, and GBTC) reported net outflows of $268.9 million last week, with only minor inflows this week—insufficient to build strong upward momentum.

August has historically been a challenging month for crypto assets, and another drop in BTC prices cannot be ruled out. However, the strong support level at $52,000 is expected to hold, with September and October anticipated to offer significant opportunities for the crypto market.