Bitcoin traded at $80,099 at 3:12 p.m. ET Wednesday, completing a swing of about 7.3% from its election-night low in roughly 12 hours.
The bottom line: liquidations accelerated the rebound, but fund flows have not confirmed durable demand.
About $950 million in leveraged cryptocurrency positions were liquidated over 24 hours. Bearish bets accounted for $560 million. Bitcoin positions made up $403 million of the total, with 76% of that amount in shorts.
CryptoQuant chief executive Ki Young Ju said $215 million in Bitcoin shorts disappeared in a single hour. The squeeze followed a low during the 10 p.m. ET hour Tuesday and a high during the 10 a.m. hour Wednesday.
A relief rally after the vote
Democrats captured both congressional chambers, leaving President Donald Trump with an opposition Congress. CoinShares head of research James Butterfill said the result had largely been incorporated into Bitcoin’s price before the vote, allowing a relief rally once the uncertainty ended.
Lumida chief executive Ram Ahluwalia had outlined a similar path before the election, predicting “a one and done washout” that would reset asset prices.
Volatility measures retreated as markets processed the outcome. Bitcoin’s DVOL index fell 6%, while the Cboe VIX declined 10%. Kelly Ye, head of research at Talos, warned against treating the first reaction as a reliable forecast: “First reactions aren’t always the right ones.”
The political outlook is less comfortable for cryptocurrency companies. TD Cowen’s Jaret Seiberg wrote that the sweep makes a crypto-backed CLARITY Act “impossible”, with the relevant committees passing to Democratic control in January.
Butterfill expects slower legislative progress to weigh more heavily on exchanges, token issuers and companies seeking new permissions than on Bitcoin itself. Existing regulatory changes, including the GENIUS Act’s federal framework for payment stablecoins, remain in place.
Stocks rise and oil falls
The move extended well beyond digital assets. The Dow Jones Industrial Average gained about 1,500 points, or 3%, Wednesday afternoon. The S&P 500 rose 1.7% and the Nasdaq Composite added 1.8%. Apple and Microsoft reached record highs.
Brent crude dropped more than 9% to $93.91 a barrel, while West Texas Intermediate fell nearly 9% to $87.59. Lower energy prices eased inflation concerns and expectations of a Federal Reserve rate increase in December.
The US dollar index declined 0.55% to 101.32, its lowest since Oct. 1. Vice President JD Vance linked the Republican election losses to the Iran war, writing: “The reason we lost is the war.”
The missing buyers
US spot Bitcoin exchange-traded funds recorded $115.6 million in net outflows Tuesday, their third consecutive losing session. BlackRock’s IBIT accounted for $95 million of that withdrawal. The three-session total reached approximately $1.16 billion.
CryptoQuant’s seller-exhaustion model has fallen to levels previously associated with bear-market lows. That suggests fewer holders may be willing to sell, but analyst Darkfost identified the other half of the problem: “Even if sellers have calmed down, demand is still needed, and Bitcoin is still short of it.”
Glassnode placed the True Market Mean at $77,700 and the short-term holder cost basis at $75,700. Remaining above those levels would preserve the August uptrend.
Bitcoin was still about 36% below its all-time high near $126,080. The October jobs report arrives Friday, October CPI follows on Nov. 10, and the Federal Reserve’s next decision is scheduled for Dec. 9.
Sources
- Bitcoin Price Recovery Rebounds Toward $80,000 After Election Sell-Off
- Crypto market outlook after US midterms, will Bitcoin reclaim $80,000?
- Bitcoin Price Holds Near $80,000 As Democratic Sweep Sparks Short Squeeze
- Bitcoin rockets above $80,000 for first time since Binance hack despite Democrats sweep, but a historical crash looms
- Bitcoin Price Surges Above $80,000 in Post-Midterm Risk-Asset Rally
Photo: Shixart1985 (CC BY 2.0)
