Bitcoin traded close to $80,000 on Wednesday afternoon, marking a 3% daily gain, as traders reacted to the results of the United States midterm elections where the Democratic Party secured control of both chambers of Congress. Despite this surge, bitcoin remained approximately $26,000 below its level from a year earlier.
Key price movements and short squeeze
At 3:12 p.m. ET, bitcoin was priced at $80,099, while its market value reached about $1.61 trillion. Over the previous 24 hours, trading volumes climbed to roughly $39.6 billion. The day’s volatility was pronounced, with the lowest point occurring late Tuesday evening as election results indicated a Democratic sweep, and a peak following on Wednesday morning, constituting a 7.3% swing in less than 12 hours.
A significant factor driving the price rally was a major short squeeze. In total, $950 million in leveraged crypto positions were liquidated within 24 hours, with $560 million of that stemming from bets against rising crypto prices. Bitcoin positions represented $403 million of the liquidations, with 76% of these being short positions.
Ki Young Ju, CEO of the on-chain analytics firm CryptoQuant, reported that $215 million in bitcoin short contracts were liquidated in a single hour on Wednesday afternoon.
CryptoQuant CEO Ki Young Ju highlighted that $215 million in bitcoin shorts were closed out within just one hour, reflecting the speed and scale of the squeeze.
James Butterfill, head of research at CoinShares, stated that the market had already factored a Democratic victory into the price, paving the way for a relief rally as election uncertainty faded.
Ram Ahluwalia, CEO of investment firm Lumida, anticipated a rapid market correction if Democrats took full control, describing it as “a one and done washout” for asset prices.
Mini dictionary: CoinShares is a digital asset investment firm known for its market research and analysis, focusing on ETFs and investment products in the crypto sector.
Broader market reaction: Stocks, oil and the dollar
Bitcoin’s gains came amid broader positive sentiment in financial markets. The Dow Jones Industrial Average advanced by about 1,500 points, or 3%, while the S&P 500 and Nasdaq Composite each gained over 1.7%. Major technology companies Apple and Microsoft recorded new all-time highs.
Commodities also saw significant moves. Brent crude oil fell more than 9% to $93.91 per barrel, and West Texas Intermediate dropped nearly 9% to $87.59. The drop followed comments from Vice President JD Vance, who attributed Republican setbacks to the Iran war.
Vice President JD Vance remarked on X, “The reason we lost is the war,” noting the impact of foreign policy on election results and market sentiment.
A softer oil market may ease inflation pressures. Meanwhile, the US dollar index declined 0.55% to 101.32, its lowest since October 1, reinforcing the risk-on mood in global markets.
| Asset | Change | Latest Price |
|---|---|---|
| Bitcoin (BTC) | +3% | $80,099 |
| Dow Jones | +3% (+1,500 pts) | N/A |
| S&P 500 | +1.7% | N/A |
| Brent crude | -9% | $93.91/barrel |
| Dollar Index (DXY) | -0.55% | 101.32 |
What’s next for bitcoin price?
Investor demand through US-based spot bitcoin ETFs lagged. On Tuesday, bitcoin ETFs reported net outflows totaling $115.6 million, with BlackRock’s IBIT product accounting for $95 million of the decline. Over three consecutive sessions, outflows reached nearly $1.16 billion. Wednesday’s ETF flows were still pending by the session’s end.
The regulatory landscape also appeared to tighten. Policy analyst Jaret Seiberg from TD Cowen assessed that a Democratic sweep would make the passage of the CLARITY Act, which would benefit crypto, unfeasible. Upcoming changes will see key Congressional committees related to digital assets shift under Democratic leadership beginning in January.
Mini dictionary: The CLARITY Act is a proposed US legislative measure seeking to define regulatory oversight for digital assets and provide legal certainty for the crypto industry.
On-chain analysis from Glassnode described the recent movement as a “retest” of support levels first breached in August. The firm identified the True Market Mean at $77,700 and the short-term holder cost basis at $75,700 as key support thresholds. Maintaining prices above these levels may preserve the uptrend initiated in late summer.
Economic data releases may sway sentiment in the days ahead. The October US jobs report is due on Friday, followed by inflation data on November 10 and the Federal Reserve’s next policy decision on December 9. Bitcoin remains about 36% below its all-time peak near $126,080, with analysts watching to see if ETF demand will return to support further advances.
As of the latest update, bitcoin traded around $80,200, consolidating gains following the dramatic post-election squeeze.
