Bitcoin Price Taps $81K After Midterms—But Analysts Warn a Trap Is Set

Bitcoin traded above $81,000 on Wednesday for the first time since Oct. 29, rebounding sharply from a multi-week low after the U.S. midterm elections. According to Cryptonews.net, citing Bitstamp data, the asset fell to an intraday low of $75,618 shortly before midnight, then reversed as early returns indicated Democrats might secure control of both houses of Congress. The advance was gradual at first, gaining about $3,000 over nearly eight hours, before a further $3,000 spike in under an hour carried it to $81,105.

The volatility produced heavy liquidations. Coinglass data indicates roughly $307 million in short positions were wiped out over the 24 hours ending 1:21 p.m., with long liquidations of about $96 million, bringing total bitcoin liquidations above $403 million. Across the broader crypto market, liquidations exceeded $974 million, of which more than $563 million were short positions.

The election outcome presents a policy headwind for the industry. Despite an unprecedented campaign war chest funneled through super PACs such as Fairshake, the crypto lobby failed to protect several key pro-crypto Republicans from voter backlash against the Trump administration's second-term record. With Democrats gaining control of Capitol Hill, observers warn that the White House's pro-industry agenda faces added legislative resistance. Strategy Executive Chairman Michael Saylor cautioned against a purely partisan reading, citing Florida's election of a governor aligned with a federal bitcoin reserve and Texas's election of Democratic Sen. James Talarico, who has previously voted to create a state reserve. Market observers also argue investors had already priced in a Democratic victory, shifting attention back to inflation and incoming Federal Reserve policy.

Bitfinex Alpha analysts, however, contend the rebound lacks genuine spot demand. Per the report, recoveries since late October have been driven mainly by short covering, while recent buyers continue to sell into rallies. Support below $77,000 appears heavily leverage-driven: aggregate futures open interest reached 701,548 BTC on Nov. 3, its highest since late September, with perpetual funding near 11% annualized. Only about 353,000 BTC was acquired between $75,000 and $77,000, and a daily settlement below $75,839 could expose a liquidity pocket between $70,000 and $75,000. Options positioning ahead of the CPI release shows more than twice as many puts as calls, signaling sustained demand for downside protection.