He is also seeing other signs that the recent selloff may be running its course.
The Crypto Fear and Greed Index and measures of seller exhaustion are showing patterns similar to those seen during the first pullback of a new bitcoin bull market, Sullivan said.
“What we need for confirmation is the 200-day moving average to hold on any additional weakness short term,” he said.
Updated futures positioning data is expected Tuesday and should provide a clearer picture of how traders are positioned following the exchange withdrawals. The election, meanwhile, could bring another round of volatility.
Prediction markets Polymarket and Kalshi have put the possibility of Democrats taking control of both chambers of Congress in focus. Such an outcome would likely stall the Clarity Act and other crypto legislation.
Mark Connors, chief investment officer at Risk Dimensions, thinks investors are spending too much time trying to trade the election outcome.
“All eyes are on Polymarket, Kalshi and early exit polls,” Connors said. “That is time misspent in our opinion, especially for a year-end play.”
Even if Democrats win both chambers, Connors argues that crypto adoption has sufficient backing from regulators and large financial firms to continue advancing.
He pointed to investments in round-the-clock trading by Intercontinental Exchange (ICE) and Robinhood HOOD$85,06, as well as banks’ efforts to build stablecoin payment systems.
