Bitcoin traded near $80,000 on Wednesday afternoon, up roughly 3% on the day and about $26,000 below its price one year ago, as markets shook off election-night jitters triggered by the Democratic sweep of Congress, according to Bitcoin Magazine Pro data.

At 3:12 p.m. ET, bitcoin changed hands at $80,099, carrying a market capitalization of approximately $1.61 trillion and about $39.6 billion in trading volume over the prior 24 hours.

The day's low printed during the 10 p.m. ET hour on Tuesday, as results showed Democrats taking both chambers of Congress, while the high arrived during the 10 a.m. hour on Wednesday. That amounts to a swing of roughly 7.3% from bottom to top in approximately 12 hours.

The rally was driven by a short squeeze, a rapid climb that forces leveraged traders betting against the price to buy back bitcoin to close their positions, which can amplify the move. Roughly $950 million in leveraged crypto positions were liquidated over 24 hours — exchanges automatically close positions once losses exceed posted margin — and bearish bets made up $560 million of that figure. Bitcoin positions accounted for $403 million of the total, 76% of which were shorts.

CryptoQuant CEO Ki Young Ju wrote on X Wednesday afternoon that $215 million in bitcoin shorts were liquidated within a single hour.

JUST IN: Bitcoin surges to $81,000 pic.twitter.com/k1bGzrrzCP — Bitcoin Magazine (@BitcoinMagazine) November 4, 2026

The prevailing view among analysts is that the sell-off had already done its work. CoinShares head of research James Butterfill said the sweep was largely priced into bitcoin before the vote, leaving room for a relief rally once the uncertainty cleared. Lumida CEO Ram Ahluwalia had laid out a similar path in a podcast interview the day before the election, saying a Democratic sweep would bring “a one and done washout, and that resets where asset prices are.”

Stocks, Oil and a Weaker Dollar

Bitcoin did not rally alone. The Dow Jones Industrial Average rose about 1,500 points, or 3%, on Wednesday afternoon, while the S&P 500 climbed 1.7% and the Nasdaq Composite gained 1.8%. Apple and Microsoft touched record highs.

Oil moved the most. Brent crude fell more than 9% to $93.91 a barrel and West Texas Intermediate dropped nearly 9% to $87.59 by 12:36 p.m. ET, CNBC reported, after Vice President JD Vance blamed the Republican losses on the Iran war.

“The reason we lost is the war,” Vance wrote on X.

The development matters for bitcoin because crude above $100 has kept inflation elevated and the Federal Reserve leaning toward a December rate hike. The U.S. dollar index fell 0.55% to 101.32 in early trading, its lowest level since Oct. 1.

What Comes Next for Bitcoin

Demand from funds has not yet caught up with the price. U.S. spot bitcoin ETFs shed $115.6 million on Tuesday, their third straight session of outflows, with BlackRock's IBIT losing $95 million. Daily flows through the funds are widely tracked as a gauge of investor demand through that channel. The three-day total comes to approximately $1.16 billion, and Wednesday's flows will be reported after the U.S. close.

The policy picture worsened for the industry rather than improving. TD Cowen's Jaret Seiberg wrote that the sweep makes a crypto-backed CLARITY Act “impossible,” while the congressional committees that oversee crypto pass to Democratic control in January. The CLARITY Act is the pending market-structure bill intended to set a regulatory framework for digital assets.

On-chain analysts frame the move as a retest. Glassnode said in its Week on Chain report that bitcoin is testing the levels it broke above in August, with the True Market Mean at $77,700 and the short-term holder cost basis at $75,700. Both figures come from cost-basis models, which estimate the average price paid by segments of the market and are used as reference levels for the trend. Holding above those levels, the firm wrote, keeps the August uptrend in place.

The calendar remains busy. The October jobs report lands Friday, October CPI follows on Nov. 10 and the Federal Reserve's next decision arrives on Dec. 9, as noted in Tuesday's preview. Bitcoin remains about 36% below its all-time high near $126,080.

The test now is whether ETF buyers return to carry the price once the shorts are cleared from the market. At the time of writing, the bitcoin price stands near $80,200.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.