Bitcoin holds near $80,000 as $560m of short bets are wiped out after Democratic sweep
Bitcoin traded near $80,000 on Wednesday afternoon, up about 3% on the day, after a Democratic sweep of Congress triggered a short squeeze that wiped out $560 million of bets against crypto prices in 24 hours. The coin 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, according to Token Times.
The move was violent in both directions. Bitcoin bottomed in the 10 p.m. ET hour on Tuesday as results showed Democrats taking both chambers, then peaked in the 10 a.m. hour on Wednesday, a swing of about 7.3% in roughly 12 hours. About $950 million in leveraged crypto positions were liquidated over the day, $403 million of them bitcoin positions, 76% of which were shorts. CryptoQuant chief executive Ki Young Ju wrote on X that $215 million in bitcoin shorts were liquidated in a single hour.
Analysts said the sell-off had already done its work before the vote. CoinShares head of research James Butterfill said the sweep was largely priced into bitcoin beforehand, leaving room for a relief rally once the uncertainty cleared. Lumida chief executive Ram Ahluwalia had predicted the same path in a podcast interview the day before the election: a Democratic sweep would bring "a one and done washout, and that resets where asset prices are."
Bitcoin did not rally alone. The Dow Jones Industrial Average rose about 1,500 points, or 3%, while the S&P 500 climbed 1.7% and the Nasdaq Composite gained 1.8%, with Apple and Microsoft touching record highs. 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 blamed Republican losses on the Iran war. Cheaper oil matters because crude above $100 had kept inflation hot and the Federal Reserve leaning toward a December hike. The dollar index fell 0.55% to 101.32, its lowest since 1 October.
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 is about $1.16 billion. TD Cowen's Jaret Seiberg wrote that the sweep makes a crypto-backed CLARITY Act "impossible", and the committees overseeing crypto pass to Democrats in January. Glassnode said in its Week on Chain report that bitcoin is testing 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 keeps the August uptrend in place. Bitcoin remains about 36% below its all-time high near $126,080, with the October jobs report due Friday, October CPI on 10 November and the Fed's next decision on 9 December.
