Bitcoin prices surged strongly as uncertainty surrounding the U.S. midterm elections gradually dissipated.
Bitcoin (BTC) has erased earlier losses, with prices continuing to climb as uncertainty over the U.S. midterm elections subsided. Earlier on Wednesday, reports indicated that Democrats were winning control of both chambers of the U.S. Congress, dealing a blow to crypto-supportive U.S. President Trump. As a result, Bitcoin briefly fell below $76,000.
However, Bitcoin quickly staged a V-shaped rebound, recovering all of its early-session losses. As of press time, Bitcoin was up 0.5% on the day, trading at approximately $77,883. Dick Lo, founder of TDX Strategies, said the strong rebound reflects fading market uncertainty. Lo stated: "Bitcoin initially declined due to a sweeping Democratic victory in the midterm elections, but as the election results became clear and political uncertainty was removed, Bitcoin subsequently rebounded."
Lo explained that the market generally believes a Democrat-controlled Congress is unfavorable to the legislative process for crypto-supportive policies. However, a situation where the executive and legislative branches are controlled by different parties also means a major and market-adverse policy shift is unlikely. He added that President Trump can still govern through executive orders while using the presidential veto to block bills proposed by Democrats.
Nicolas Quatravaux, Head of EMEA at Paradigm, a leading institutional liquidity network in the crypto derivatives space, expressed a similar view. He said: "The election outcome itself was actually not surprising. Prediction market Polymarket had already priced in a Democratic victory probability above 75% for some time. Therefore, the key to overnight market volatility was not the election result itself, but the elimination of uncertainty."
Quatravaux noted that overnight options trading was very active. He said: "On election day, we recorded approximately $660 million in notional Bitcoin options block trades, more than double the previous day's volume. Of that, call option buying accounted for approximately $420 million in notional value, while call option selling accounted for approximately $105 million in notional value."
A call option is a derivative that bets on the underlying asset's price rising, while a put option is used to bet on price declines. A block trade refers to a large transaction negotiated privately between parties rather than matched directly on the open market.
Traders bought $230 million worth of Bitcoin call options, betting that prices would rebound after the election results emerged. At prices near the lows, other traders sold options to monetize previously held hedging positions and profit from high volatility.
Bitcoin was not the only asset to recover its early-session losses. Nasdaq index futures also narrowed their declines. As of press time, Nasdaq futures were at 28,200 points, down only 0.3% on the day, after having fallen more than 2% at one point.
Martin Lee, Head of Research at DWF Labs, said: "As the election results were confirmed, uncertainty has been eliminated, which strengthened the confidence of market participants to re-enter. We also saw similar price action in S&P 500 and Nasdaq-related trading on the Hyperliquid platform."
Outlook
Markus Thielen, founder of 10x Research, expects Bitcoin prices to rise further. He pointed out that Bitcoin's daily Stochastics indicate that Bitcoin has entered oversold territory. This indicator is a momentum measure that can be used to determine whether an asset's price has fallen too quickly and too much in a short period.
Thielen said that according to the Stochastics, Bitcoin is currently oversold and prices could rebound toward $82,000. He said: "As Trump indicated he would respect the election results and U.S. voters expressed an anti-war stance through their votes, hopes for the resumption of peace negotiations were reignited in the market, and Bitcoin rebounded accordingly. Bitcoin is now oversold, and the next target should be a rebound to around $82,000."
Vikram Subburaj, CEO of Indian crypto trading platform Giottus, said that market performance in the coming trading sessions is more noteworthy than the initial rebound. He said: "If Bitcoin can hold above $78,000 despite continued ETF redemptions, it means buying from other channels is absorbing that selling pressure. If ETF fund flows also turn to net inflows, the rebound will gain another source of demand."
He added: "The improvement in the market is already reflected in the data, with selling through ETF channels having slowed noticeably. If sustained net buying can emerge, it will lay a more solid foundation for this rebound."
According to SoSoValue data, U.S.-listed spot Bitcoin ETFs recorded $515 million in net outflows last month, and in just the first two trading days of November, outflows already reached a level comparable to the previous month. These outflows, combined with the Coinbase premium indicator being in negative territory, both indicate that market demand remains weak.
Lacie Zhang, Head of Research at Bitget Wallet, noted in an analysis report she shared that for a sustained, long-term recovery to take hold, net fund inflows must turn positive again. Zhang said: "The overall trend remains one of consolidation below the key resistance level of $80,000 to $82,000. The speed of this rebound is a positive signal, but for a more durable recovery, Bitcoin still needs to break back above this resistance range while receiving sustained support from spot market demand and institutional capital inflows."
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