On Wednesday afternoon, Bitcoin’s price hovered around $80,000, reflecting an increase of approximately 3% for the day. This figure remains about $26,000 lower than its value from a year prior, as market participants appeared to have dismissed the election-night anxieties stemming from the Democratic sweep of Congress, as reported by data. Bitcoin changed hands at $80,099 at 3:12 p.m., with a market cap of about $1.61 trillion and roughly $39.6 billion in trading volume over the past 24 hours. The low occurred during the 10 p.m. hour on Tuesday, as results indicated that Democrats secured control of both chambers. The peak occurred during the 10 a.m. hour on Wednesday. That represents a fluctuation of approximately 7.3% from the lowest to the highest point within a span of about 12 hours. The ascent was a result of a short squeeze. Approximately $950 million in leveraged cryptocurrency positions were liquidated within a 24-hour period, with short positions accounting for $560 million of that total.
Bitcoin positions represented $403 million of the overall total, with shorts comprising 76% of that amount. On Wednesday afternoon, Ki Young Ju reported on X that $215 million in bitcoin shorts were liquidated within a single hour. The consensus among analysts is that the sell-off has already fulfilled its purpose. James Butterfill, indicated that the sweep was predominantly factored into bitcoin prior to the vote, creating potential for a relief rally as the uncertainty dissipated. Lumida CEO Ram Ahluwalia articulated a similar strategy in a podcast interview conducted the day prior to the election. A Democratic sweep, he stated, would result in “a one and done washout, and that resets where asset prices are.” Bitcoin’s price did not experience a rally in isolation. The Dow Jones Industrial Average experienced an increase of approximately 1,500 points, representing a 3% rise, on Wednesday afternoon. Meanwhile, the S&P 500 advanced by 1.7%, and the Nasdaq Composite saw a gain of 1.8%. Apple and Microsoft reached unprecedented levels.
Oil experienced the most significant movement. Brent crude experienced a decline exceeding 9%, settling at $93.91 per barrel, while West Texas Intermediate saw a nearly 9% drop to $87.59 by 12:36 p.m., as reported by source, following Vise President JD Vance’s assertion that the Republican losses were attributable to the Iran war. “The reason we lost is the war,” Vance wrote on X. That is significant for bitcoin price as crude oil prices exceeding $100 have sustained elevated inflation levels, prompting the Federal Reserve to consider a rate hike in December. The U.S. dollar index experienced a decline of 0.55%, reaching a value of 101.32 in early trading, marking its lowest point since October 1. Demand from funds has yet to align with the prevailing price levels. U.S. spot bitcoin ETFs experienced outflows totalling $115.6 million on Tuesday, marking their third consecutive session of declines, with BlackRock’s IBIT seeing a reduction of $95 million. The total over the three-day period amounts to approximately $1.16 billion. Wednesday’s flows will be disclosed following the conclusion of trading in the U.S. The policy landscape has deteriorated for the industry, rather than improved. TD Cowen’s Jaret Seiberg noted that the sweep renders a crypto-backed CLARITY Act “impossible,” as the committees overseeing crypto will transition to Democratic control in January.
On-chain analysts characterise the movement as a retest. Source said in its Week on Chain report that the bitcoin price is testing the levels it broke above in August, with the True Market Mean at $77,700 and the short-term holder cost basis at $75,700. Holding above them, the firm wrote, keeps the August uptrend in place. The calendar remains active. The October jobs report is scheduled for release on Friday, followed by the October CPI on November 10. The Federal Reserve’s subsequent decision will be made on December 9, as highlighted in Tuesday’s preview. Bitcoin price is currently approximately 36% lower than its peak, which was around $126,080. The current challenge lies in determining if ETF purchasers will re-enter the market to support the price after the short positions have been eliminated. At the time of writing, the price of bitcoin hovers around $80,200. The current challenge lies in determining if ETF purchasers will step in to support the price following the exit of short sellers. At the time of writing, the price of bitcoin hovers around $80,200.
