Bitcoin opened higher in New York ahead of the deadline for US lawmakers to approve the second coronavirus stimulus package before the November 3rd presidential election.

The benchmark cryptocurrency surged 1.28 percent after the opening bell. Its move came as a part of an uptrend across the European and Asian trading sessions. The price rose to as far as $11,963 for the first time since September 2. That raised hopes of an extended upside move above the $12,000-resistance level.

Bitcoin is approaching overbought levels, risking correction near $12K. Source: TradingView.com

Bitcoin’s New York pump also came in sync with the US indexes. On Tuesday, the S&P 500 index jumped 0.5 percent at the open, while the tech-savvy Nasdaq Composite added the same percentage. That renewed the positive correlation between Bitcoin and Wall Street a day after they showed signs of decoupling.

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Stimulus Deadline

All the risky markets that rose against the first US government stimulus of $2 trillion in April surged on Tuesday. Investors anticipated some form of outcome after House Speaker Nanci Pelosi said that Congress would need to agree on a package on Tuesday if they want to see it passed before Election Day.

Klaus Baader, the global chief economist at Société Générale, told FT that US politics is running the markets, adding that a deal before the election appeared was “unlikely.” He, nevertheless, added that the rise in US household savings may offset the impact of a no-stimulus case.

Bitcoin aficionados, on the other hand, appeared prepared for the stimulus news as they increased their investments into the cryptocurrency. Square, one of the leading global payments firm, last week showed $50 million worth of BTC in its balance sheets. Asset management firms, including Stone Ridge, also revealed hundreds of millions of dollars worth of investments in Bitcoin.

“Multiple stimulus packages in 2020 now total more than $3 trillion in QE,” said Anthony Pompliano, co-founder of Morgan Creek Digital, in a note to investors.

“We have another $2 trillion on the way […] The average investor fears inflation right now, regardless of whether we actually see that inflation or not. This fear has driven significant capital flows into inflation-hedge assets (Gold, Bitcoin, Real estate, etc).”

What’s Next for Bitcoin

With no signs from Congress on the deal yet, Bitcoin risks undergoing a period of high volatility ahead of the election.

With that said, traders with a short-term outlook would likely sell-off their holdings near the local top. Meanwhile, those with long-term risk appetite would use the fresh dips to hoard more Bitcoin.

BTC/USD was trading at $11,967 at the time of this writing, up 1.82 percent.