Bitcoin Holds Near $80,000 as Short Squeeze Follows Democratic Congressional Sweep
Bitcoin traded near $80,000 Wednesday afternoon, rebounding about 3% from an election-night low near $75,600 after results showed Democrats winning both chambers of Congress. Analysts attributed the rebound to a short squeeze and a broader stock rally, though fund outflows and a tougher policy outlook for crypto remain open questions.
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Price Rebounds After Election-Night Low
Bitcoin traded at $80,099 at 3:12 p.m. ET on Wednesday, up about 3% on the day, according to Bitcoin Magazine Pro data. The asset's market capitalization stood near $1.61 trillion, with roughly $39.6 billion in 24-hour trading volume. The move followed a low in the 10 p.m. ET hour on Tuesday, when results showed Democrats taking both chambers of Congress, and a high in the 10 a.m. hour on Wednesday.
CoinDesk's live coverage reported bitcoin steady near $80,000 as Wall Street turned higher, while ether jumped 4% and crypto ETFs drew fresh inflows. The sources agree on the direction of the move but differ in emphasis: Bitcoin Magazine highlights the intraday swing of roughly 7.3% from bottom to top, while CoinDesk's framing centers on the broader rally and ether's stronger gain.
Short Squeeze and Liquidations
Bitcoin Magazine attributes much of the move to a short squeeze. About $950 million in leveraged crypto positions were liquidated over 24 hours, of which $560 million were bets against prices. Bitcoin positions accounted for $403 million of the total, with 76% of that on the short side. CryptoQuant CEO Ki Young Ju wrote on X that $215 million in bitcoin shorts were liquidated within a single hour on Wednesday afternoon.
CoinShares head of research James Butterfill said the sweep was largely priced in before the vote, leaving room for a relief rally once uncertainty cleared. Lumida CEO Ram Ahluwalia had described a similar scenario in a podcast the day before the election, calling a Democratic sweep "a one and done washout" that would reset asset prices.
Broader Markets and Macro Backdrop
Equities rallied alongside crypto. Per Bitcoin Magazine, the Dow Jones Industrial Average rose about 1,500 points, or 3%, the S&P 500 climbed 1.7%, and the Nasdaq Composite gained 1.8%. Brent crude fell more than 9% to $93.91 a barrel and West Texas Intermediate dropped nearly 9% to $87.59, after Vice President JD Vance attributed Republican losses to the Iran war, CNBC reported. Bitcoin Magazine notes that crude above $100 had kept inflation elevated and the Federal Reserve leaning toward a December rate hike. The U.S. dollar index fell 0.55% to 101.32, its lowest since Oct. 1.
ETF Flows and Policy Outlook
Fund demand has not yet matched the price recovery. U.S. spot bitcoin ETFs shed $115.6 million on Tuesday, their third straight session of outflows, with BlackRock's IBIT accounting for $95 million of that. The three-day total is about $1.16 billion. Wednesday's flow data will be reported after the U.S. close. CoinDesk, by contrast, described crypto ETFs as drawing fresh money during the session, a discrepancy that likely reflects different reporting windows and should be resolved against final daily flow data.
On policy, TD Cowen analyst Jaret Seiberg wrote that the sweep makes a crypto-backed CLARITY Act "impossible," noting that the committees overseeing crypto pass to Democrats in January.
Technical Levels and Upcoming Data
Glassnode said in its Week on Chain report that bitcoin is testing levels it broke above in August. It identified the True Market Mean at $77,700 and the short-term holder cost basis at $75,700 as key support, writing that holding above them keeps the August uptrend intact. The next catalysts are the October jobs report on Friday, October CPI on Nov. 10, and the Fed's decision on Dec. 9. Bitcoin remains about 36% below its all-time high near $126,080.
Why It Matters
For Traders
Bitcoin's ability to hold the $75,700 to $77,700 on-chain support zone over the next few sessions will matter more than the squeeze itself, with Friday's jobs report a near-term catalyst.
For Investors
The sweep's policy implications for crypto market structure legislation in 2025 may weigh more on multi-month expectations than the short-term price rebound does.
For Builders
Sustained ETF outflows alongside a rebound suggest spot demand remains the constraint, so protocols relying on institutional inflow assumptions should stress-test against a slower recovery.
This article is for information only and is not financial advice. Read the full disclaimer.
