US political gridlock supports risk assets
The much-awaited US midterm elections ended with the Democrats winning both the House and the Senate. This victory cleared a major source of uncertainty and lowered expectations that US President Donald Trump would resume military strikes against Iran.
In fact, Senate Democratic Leader Chuck Schumer vowed on Wednesday to push for an end to the Iran war and said that his party could use control over government funding to press for that goal.
The optimism is dragging crude oil prices lower, with West Texas Intermediate (WTI) reaching levels not seen since early September, trading around $87 on Thursday, and easing inflation fears.
Moreover, expectations that fiscal gridlock in Washington could further limit government spending put downward pressure on US bond yields, keeping the US Dollar (USD) depressed and acting as a tailwind for risky assets, with BTC reclaiming the $80,500 mark.
Over $700 million in liquidations
As explained in the previous report, BTC experienced heightened volatility over the past 24 hours, with $794.30 million in positions liquidated, according to the Coinglass chart below.
Of these liquidated positions, 70% were shorts, suggesting leveraged bearish traders were wiped out most as BTC climbed above $80,000. The wave of short liquidations may have further amplified buying pressure, accelerating the Crypto King’s recovery.
Mild ETFs inflows
Institutional demand for BTC shows mild signs of optimism. SoSoValue data show that BTC spot ETFs recorded a mild inflow of $74.57 million on Wednesday, breaking its three consecutive days of outflows. If this inflow trend continues and intensifies throughout this week, BTC could see further recovery.
Bitcoin technical outlook: Moves above key EMAs
Bitcoin price trades at $80,777 on Thursday, maintaining a constructive bullish bias as it remains above the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) at $80,172, $77,904, and $76,547, respectively. This configuration suggests the broader uptrend is intact, while the Relative Strength Index (RSI) at 51 and a Moving Average Convergence Divergence (MACD) histogram that has turned positive hint at recovering bullish momentum rather than overbought conditions.
On the topside, the next significant hurdle is the horizontal resistance at $85,000, where profit-taking could emerge if the rally extends.
On the downside, initial support is seen at the 50-day EMA around $80,172, followed by the 100-day EMA near $77,904 and then the 200-day EMA at $76,547, with the bullish outlook likely to persist as long as BTC holds above this layered EMA support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
