• Bitcoin rebounds before coming under pressure again

• Harris seen as winner of first presidential debate with pro-crypto Trump

• Unconvincing recovery in equities doesn’t help sentiment for cryptos

Bitcoin’s rebound runs into trouble

Bitcoin and other major cryptos have bounced back from their late August-early September slide, but lingering anxiety in the markets about a slowing US economy is limiting the upside, while the country’s looming presidential election is also keeping investors on edge.

Election fever gathered pace on Tuesday when presidential hopefuls Kamala Harris and Donald Trump faced each other in their first televised debate. Crypto investors are following the election race very closely, probably much more so than the rest of the financial markets as the outcome could have direct implications on the crypto industry.

Trump trade fades as Harris enters the picture

Bitcoin enjoyed a strong rally in July when Trump’s campaign received a major boost from the failed attempt to assassinate him. But the subsequent developments that led to Joe Biden’s decision to step aside, paving the way for Kamala Harris to become the Democratic party’s nominee, have dragged Bitcoin lower from the July highs.

Trump is campaigning on a pledge to make America “the crypto capital of the world” while Harris has yet to state her official stance on cryptos. The stakes are therefore high as to who gets voted into the White House in November and with instant polls suggesting that Harris was the winner of last night’s debate, Bitcoin is on the backfoot today.

Bitcoin stuck within bearish channel

The price is trading in the $56,600 region after being unable to reclaim the $58,000 handle yesterday. The momentum indicators are mixed, so a resumption of the rebound from the one-month low of $52,511 cannot be ruled out, and Bitcoin may yet make a dash for the 50-day moving average around $60,300 in the near term.

However, if today’s selloff accelerates, which there is a significant risk of if the rebound on Wall Street also falters, a re-test of the lower line of the bearish channel is likely. A downside breakout from the channel would signal a deepening bearish outlook.

Second debate eyed

Yet, despite the clear preference of the crypto world for Trump to become the next president of the United States, a Harris presidency would not necessarily be a disaster, as she would likely continue the Biden policies of promoting the further adoption of cryptos but under the watchful eye of regulators. Hence a small relief rally is possible should she win.

In the meantime, investors will be on standby for any announcement about a second debate between Harris and Trump. Another debate could raise the prospect of the candidates being asked about cryptocurrencies to clarify their positions, potentially keeping Bitcoin in a volatile range at least until election day.

It’s worth noting too that although the price pattern suggests the latest bounce may well have been a technical correction, it was very probably also lifted by large inflows into spot Bitcoin ETFs, snapping a long losing streak of outflows between August 27 and September 6.