Bitcoin (BTC) recovered from a 7-week low on Wednesday after dropping below $76,000 as results from the US midterm elections showed Democrats winning control of both the House and Senate.
Election Results Trigger Brief Selloff
Data from TradingView showed BTC/USD falling into Tuesday’s daily close as election results came in. The pair dropped to a low of $75,618 on Bitstamp, a level last seen on Sept. 16, before rebounding as high as $78,039 over the next three hours.
According to CoinGlass, the price dip liquidated late BTC long positions below $76,000, while a wall of asks kept upside contained below $78,000. Total crypto long liquidations over the past 24 hours stood at $288 million.
Kelly Ye, head of research at institutional digital asset trading platform Talos, told Cointelegraph that markets had largely priced in the election outcome.
“Bitcoin moved about 1.7% after the polls closed, close to the roughly 1.8% options had priced, and there was no major leverage flush. The election was the main event, but markets had largely prepared for it,” she said.
US stock futures showed similar moves, initially falling before recouping some losses. S&P 500 and Nasdaq 100 futures were both down by about 0.3% at the time of writing.
Late Tuesday, Anthony Saglimbene, chief market strategist at Ameriprise Financial, told CNBC that concerns over data-center and broader AI capital expenditure were producing an adverse market reaction to the Democratic gains.
“If you get some governorships that are Democratic, what does that mean for the data center buildout, which has already seen a lot of skepticism over the last couple weeks in terms of the hyperscaler capex spending?” he asked.
In an interview with The Wall Street Journal, US President Donald Trump, who previously said he could become “Mr. Veto” to block Democratic policy initiatives, struck a conciliatory tone.
“I think we’ll work with the Democrats, and we’ll get along very well with them,” he said.
50-Week Moving Average in Focus
Bitcoin’s drop to $75,618 coincided with its 50-week simple moving average (SMA), a trend line that has held as support since mid-September.
In an analysis posted on X, Keith Alan, co-founder of crypto trading suite Material Indicators, identified the 50-week SMA as a line in the sand for Bitcoin bulls. Failure to defend it, he argued, would open the door to a “deeper correction ahead.”
Crypto trader and analyst Rekt Capital, who had forecast BTC/USD dipping below $76,000 after a failed breakout attempt above $78,000, continued to flag overhead resistance on the three-day chart.
“If this continues then these newfound 3-Day Lower Highs may guide price back towards the ~$75.5k level below over time,” he said on Wednesday.
