Bitcoin shook off a six-week low and pushed back above $78,000 after Democrats won control of both chambers of Congress, a recovery that played out even as institutional money kept draining from US spot Bitcoin ETFs.
The largest cryptocurrency rose about 0.7% to $78,354, according to market data. Prices had initially slid as election results pointed to a stronger Democratic grip on Capitol Hill, a result traders read as a potential complication for crypto market-structure legislation working its way through Washington. The selling reversed once investors had a clearer read on the political direction, and Bitcoin climbed back from its session lows.
"The initial market response to the election results was negative, as expectations grew that Democratic control might complicate new cryptocurrency regulations," the market commentary noted, adding that confidence returned once policy direction became clearer.
Derivatives desks saw a burst of activity alongside the rebound. Paradigm, a crypto options liquidity network serving institutional clients, reported $660 million in Bitcoin options block trades on election day, more than double the prior session. Buyers snapped up roughly $420 million in call options while selling about $105 million, a tilt toward bets that pay off if prices climb, though some of that flow likely reflected protective hedging.
The contrast with late October is stark. Bitcoin was then struggling to hold above $77,000 as heavy ETF redemptions weighed on sentiment.
ETF withdrawals keep the pressure on
Fund flows remain the weakest link in the recovery. Figures compiled by Farside Investors show US spot Bitcoin ETFs shed $643.2 million on October 30, $398.6 million on November 2 and $115.6 million on November 3, a combined $1.16 billion over three sessions.
Note: The November 3 IBIT figure refers to Tuesday's redemptions; the November 4 line reflects Monday's outflow as reported in the same dataset.
BlackRock's IBIT, the largest Bitcoin ETF by assets, accounted for $95 million of Tuesday's redemptions, well below Monday's $405.3 million. The slower pace suggests redemption pressure is easing, but it does not show that institutions have gone back to accumulating Bitcoin.
Past outflow episodes have shown that Bitcoin can stage price rebounds while fund flows stay negative, leaving traders focused on whether the token can defend the $78,000 mark in the near term.
The $80,000 hurdle
Bitcoin now faces resistance near $80,000, a psychological barrier for traders. A daily close above that level would put the 30-day moving average at $81,319 in play, with $82,000 next in line -- a zone flagged by 10x Research founder Markus Thielen and by market maker QCP Capital, which earlier identified an $80,000-$82,000 buying band.
A failure to hold $78,000 would open the door to $76,000, then support around $75,000, with the 200-day moving average sitting near $73,200.
Broader financial conditions could add to the headwinds. Rising US Treasury yields and fresh technical weakness in technology stocks may make further gains harder to come by, even with the political uncertainty that had capped Bitcoin now partly cleared.
