Crypto market defies bearish expectations as Bitcoin, Ethereum and XRP rally after US elections

Bitcoin recovered above $80,000 on Nov. 4 as cryptocurrency prices rebounded following the U.S. midterm elections. The Bitcoin price climbed roughly 4% during the session, while a sharp reversal forced leveraged traders to close positions. The recovery followed several difficult sessions after the Oct. 29 Binance security breach.

Market data cited by CoinEdition placed Bitcoin near $80,404, up 4.2%, after an earlier decline toward $75,695. The figures represented a Nov. 4 snapshot rather than a continuously verified quote. The rebound offered some relief after Bitcoin repeatedly traded around $76,000, but it did not erase the market’s earlier losses.

Democrats won control of the House of Representatives and Senate in the Nov. 3 elections, according to election projections. Cryptocurrency prices initially weakened as results emerged before recovering the following day. The timing did not establish that the Democratic victories directly caused the rally.

Crypto Market Surge Leads to $1 Billion Liquidation

Meanwhile, the recent crypto rally caught the entire market by surprise, wiping out several futures traders, both Bulls and bears. According to Coinglass data, the crypto market saw $1 billion in liquidations in the last 24 hours.

Long traders saw $431.87 million worth of positions wiped out, while Short traders also took a $569 million hit. This highlights how today’s rally affected both sides of the trade.

Unsurprisingly, Bitcoin was the most impacted token, with $406 million in BTC positions wiped out. $243.5 million in ETH positions were also impacted. While 76% of BTC liquidations were short trades, it was only 55% for ETH.

Overall, more than 134,500 traders were liquidated in the 24 hours. The largest position was a $38 million ETH-USDT position on HTX.

While Short traders took the biggest hit overall, with 57% of the impacted value, the liquidation data reflect the limbo the market is currently in. The Fear & Greed Index also captures this at 42/100, which is Neutral Territory.

Glassnode Analysts Call Bitcoin’s Recent Performance a Healthier Reset

Meanwhile, analysts at Glassnode have described Bitcoin’s recent performance as a "healthier reset." They noted that 97.6% of short-term BTC holders were in profit around early October, which represents a sell signal. 

However, the 10% pullback from the September high means STH Bitcoin in profit has fallen to 38%, with the majority of this cohort now in loss. Analysts believe this is a better position for the market.

"The market is far less stretched than it was a month ago, "Glassnode analysts wrote, adding, "Should the share recover above 50% while price holds, it would show newer buyers back in profit and regaining confidence."

Interestingly, the analysts added that Bitcoin is now retesting its August breakout levels, noting that this is a normal occurrence after breakouts. 

They further highlighted how recent performance cleared most of the long leverage from August. However, short positions are now above the current price, with the largest cluster around $87,000. Higher shorts could further push the price toward that level.

This article provides market information, not investment advice. Cryptocurrency prices and leveraged positions carry substantial financial risks.