Bitcoin closed out a strong September with a sharp decline, approaching the $63,000 level during the U.S. trading session on Monday.

Analysts Claim Bitcoin Rally Will Come After US Elections

Despite a month of gains for digital assets, Monday’s decline underscores growing concerns among options traders who expect further declines in the weeks leading up to the November U.S. election.

While October has historically been a positive month for crypto markets, traders remain cautious. According to Wintermute, a leading crypto market maker, options traders are bracing for a pullback ahead of a possible post-election rally.

In traditional markets, U.S. stocks were flat for most of Monday, while European markets were down 1% to 2%. Japan’s new Prime Minister Shigeru Ishiba surprised markets by suddenly assuming office over the weekend, sending the Nikkei down 5% on Monday. Ishiba emphasized that Japan’s monetary policy should remain “accommodative,” signaling potential challenges for global markets.

In the US, Fed Chairman Jerome Powell made cautious statements, stating that while the economy remains in “solid shape”, future interest rate cuts will not be as aggressive as the 50 basis point cut in September. Powell warned that the Fed is not on a “pre-determined course” and will adjust policy according to evolving economic conditions.

“Looking ahead, if the economy broadly develops as expected, policy will move toward a more neutral stance over time,” Powell said, tempering expectations for more immediate stimulus.

Crypto options traders are positioning accordingly, and Jake Ostrovskis, an OTC trader at Wintermute, says the market is showing signs of further downside pressure. “With spot trading falling below $65,000, the volatility surface suggests a downward trend through late October and November, when the market began to favor calls over put protection,” Ostrovskis said. “The current situation suggests support for a post-election rally.”

*This is not investment advice.