Bitcoin, after initially falling to around $75,600 due to the initial impact of the US midterm election results, has undergone a V-shaped recovery.
Bitcoin, which fell to $75,600 following the US election results, quickly recovered its losses, while the DeFi index rose by approximately 5 percent.
Bitcoin experienced a V-shaped recovery after initially falling to around $75,600 following the initial impact of the US midterm election results. Volatility increased significantly as the market attempted to price in how the Democrats gaining a majority in both houses of Congress would affect cryptocurrency regulation.
Bitcoin rose approximately 1.3% in after-midnight trading on November 4th, returning to the $78,300 level. The fact that it later surpassed the $80,000 mark indicates that a significant portion of the initial sell-off has been recouped. However, since prices can change rapidly, the levels mentioned are specific to the time this news was published.
The recovery also spread to the altcoin market. Ether rose by approximately 2%, while the CoinDesk 80 Index, which tracks major altcoins, gained 2.3%. The DeFi Select Index was the strongest performer, rising by about 5%. Injective rose by 6.2%, and all seven assets in the index, including Ethereum, traded in positive territory.
Total trading volume in futures markets increased by 27 percent in 24 hours. The fact that open positions rose by only 3 percent indicated that the movement was largely due to investors rapidly changing their positions. Liquidations increased by 22 percent, reaching $469 million.
Bitcoin’s implied volatility over the past week has fallen from around 41 percent in the morning hours to 34 percent. Demand for put options, used to hedge against declines, also appears to have decreased with the recovery.
Despite this, market sentiment has not fully recovered. The Fear and Greed Index remains in the “fear” zone at 37, with investors’ focus shifting to the US employment report. The short-term rise should not be considered definitive proof of a lasting trend reversal.
*This is not investment advice.
