Bitcoin traded near $80,000 on Wednesday afternoon, up about 3% on the day but roughly $26,000 below its price one year ago, as markets absorbed the Democratic sweep of Congress, according to Bitcoin Magazine Pro data.
Bitcoin changed hands at $80,099 at 3:12 p.m. ET, with a market cap of about $1.61 trillion and roughly $39.6 billion in trading volume over the past 24 hours.
Short squeeze drives the move
The low came in the 10 p.m. ET hour on Tuesday, as results showed Democrats taking both chambers. The high came in the 10 a.m. hour on Wednesday, a swing of about 7.3% from bottom to top in roughly 12 hours.
The climb was a short squeeze. About $950 million in leveraged crypto positions were liquidated over 24 hours, and bets against prices made up $560 million of that. Bitcoin positions accounted for $403 million of the total, 76% of it shorts.
CryptoQuant CEO Ki Young Ju wrote on X Wednesday afternoon that $215 million in bitcoin shorts were liquidated in a single hour.
Analysts said the sell-off had already done its work. CoinShares head of research James Butterfill said the sweep was largely priced into bitcoin before the vote, leaving room for a relief rally once the uncertainty cleared.
Lumida CEO Ram Ahluwalia had laid out the same path in a podcast interview the day before the election. A Democratic sweep, he said, would bring “a one and done washout, and that resets where asset prices are.”
Stocks, oil and a weaker dollar
Bitcoin did not rally alone. The Dow Jones Industrial Average rose about 1,500 points, or 3%, on Wednesday afternoon, while the S&P 500 climbed 1.7% and the Nasdaq Composite gained 1.8%. Apple and Microsoft touched record highs.
Oil moved the most. Brent crude fell more than 9% to $93.91 a barrel and West Texas Intermediate dropped nearly 9% to $87.59 by 12:36 p.m. ET, CNBC reported, after Vice President JD Vance blamed the Republican losses on the Iran war.
“The reason we lost is the war,” Vance wrote on X.
That matters for bitcoin because crude above $100 has kept inflation hot and the Federal Reserve leaning toward a December hike. The U.S. dollar index fell 0.55% to 101.32 in early trading, its lowest since Oct. 1.
ETF outflows and policy outlook
Demand from funds has not caught up with the price. U.S. spot bitcoin ETFs shed $115.6 million on Tuesday, their third straight session of outflows, with BlackRock’s IBIT losing $95 million. The three-day total comes to about $1.16 billion. Wednesday’s flows will be reported after the U.S. close.
The policy picture got worse for the industry, not better. TD Cowen’s Jaret Seiberg wrote that the sweep makes a crypto-backed CLARITY Act “impossible,” and the committees that oversee crypto pass to Democrats in January.
On-chain analysts frame the move as a retest. Glassnode said in its Week on Chain report that bitcoin 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 stays busy. The October jobs report lands Friday, October CPI follows on Nov. 10 and the Fed’s next decision comes on Dec. 9. Bitcoin remains about 36% below its all-time high near $126,080.
The test now is whether ETF buyers return to carry the price once the shorts are gone. At the time of writing, bitcoin is near $80,200.
