Bitcoin bounced hard when Democrats swept Congress, but the real engine may not be politics at all. Behind the rally sits a forced-selling chain reaction, and what happens once it burns out will decide whether this move has any legs.
The Crypto Desk desk. Editor: Sam Daodu.
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Bitcoin (CRYPTO: BTC) dipped to $75,695 as Democrats gained control of both the House and the Senate on the night of November 3, 2026, during the midterms. However, it soon rebounded to a high of $81,004. It is now trading at $80,485, up 4.7% in the last 24 hours and 3.4% over the past week, after a brief dip to a six-week low.
The critical question is whether Bitcoin can reach $100,000 again, or whether this rally was just a reaction that cleared out bearish traders.
Short Sellers Experienced a Squeeze Above $81,000
Bitcoin’s surge past $81,000 was largely driven by short sellers being forced out of their positions. Short selling involves borrowing Bitcoin, selling it, and hoping to buy it back at a lower price. When the price rises beyond a certain point, exchanges automatically close these losing positions to limit losses, a process known as liquidation.
According to CoinGlass data, approximately $950 million in cryptocurrency positions were liquidated within 24 hours ending November 4, 2026. Of that total, $560 million, or 58.9%, came from short positions, while Bitcoin alone accounted for $403 million. Each forced closure acts like a buy order, pushing prices higher and triggering further liquidations in a chain reaction known as a short squeeze.
Bitcoin’s highest trading volume came shortly after Wall Street opened, when it broke through $80,000, coinciding with a rebound in U.S. stock futures. However, this rally isn’t due to politics alone. A short squeeze eventually runs out of steam once shorts have been cleared out, and after that, new buyers are necessary for the price to keep climbing.
Investors Anticipated the Democratic Sweep
Analysts from Bitwise and CoinShares noted that the Democratic victory was largely “priced in,” meaning many investors had already sold their holdings before the vote count. André Dragosch, head of research at Bitwise Europe, said sentiment was already quite bearish, pointing to signs of seller exhaustion.
More broadly, the total cryptocurrency market value rose only 1.15% over 24 hours, even as trading volume surged 51.5%. This suggests that while many coins changed hands, prices did not rise significantly. Market sentiment remains neutral, with a score of 46 on the Fear and Greed Index, which ranges from 0 to 100 and measures investor mood.
Ethereum (CRYPTO: ETH) rose 6.7% and typically shows more volatility than Bitcoin when market risk appetite returns. Solana (CRYPTO: SOL) rose 4%, although it remains down 20.8% over the past 30 days. Bitcoin is currently above its 20-day moving average of $80,232, but below its 50-day average of $82,006.
Some analysts warn that the current bounce could be misleading, potentially drawing buyers in before another decline. This view isn’t a certainty, but a prolonged period below the 50-day average could add weight to the concern.
The Clarity Act Faces New Hurdles With Democrats in Control
The 2026 midterms changed more than Bitcoin’s price. The Digital Asset Market Clarity Act, designed to set federal rules for cryptocurrency trading, has passed the House. In the Senate, however, a procedural vote in September 2026 fell short at 49 to 50, missing the 60 votes needed to advance the bill.
If the Senate does not act before the new Congress convenes on January 3, 2027, the bill will need to be reintroduced under a Democratic majority. Crypto journalist Eleanor Terrett reported that House Democrats are considering a broader market-structure bill that could expand the Securities and Exchange Commission’s role while limiting the Commodity Futures Trading Commission’s oversight of futures trading.
What’s Next for Bitcoin? Can It Reach $100,000 Again?
At this point, a return to $100,000 seems unlikely unless new buyers step in to support the rally. Bitcoin is currently trading 36.2% below its all-time high of $126,080, reached in October 2025, and has declined 22.5% over the past year. However, interest in Bitcoin is increasing, as shown by a 142% jump in Wikipedia page views for its entry, from 14,488 to 35,107 in the past week.
While Bitcoin’s recovery appears fragile for now, a sustained rebound depends on fresh buying interest that has yet to materialize. For Bitcoin to regain momentum, it would need to close above the 30-day high of $85,540, set on October 6, 2026. If it slips below the $75,695 low from election night, that would suggest the recent rally was merely a temporary reaction.
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Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
