Bitcoin climbed back above $80,000 on Nov. 4 as cryptocurrency prices rebounded in the wake of the U.S. midterm elections, defying bearish expectations that had built up over recent sessions. The leading cryptocurrency gained roughly 4% during the session, and the sharp reversal forced leveraged traders on both sides of the market to close out positions. The recovery followed several difficult sessions that began with the Oct. 29 Binance security breach.

Market data cited by CoinEdition placed Bitcoin near $80,404, up 4.2%, after an earlier decline toward $75,695 — a gap of roughly $4,700 between the two readings that shows how quickly conditions shifted during the session. The figures represented a Nov. 4 snapshot rather than a continuously verified quote. The rebound offered some relief after Bitcoin repeatedly traded around $76,000, though it did not erase the market's earlier losses. Other crypto assets, including Ethereum and XRP, also recorded gains.

Election Results Frame the Rebound

Democrats won control of both the House of Representatives and the Senate in the Nov. 3 elections, according to election projections. Cryptocurrency prices initially weakened as the results emerged, then recovered the following day. The timing alone does not establish that the Democratic victories directly caused the rally. Congressional control does, however, shape which legislation — including bills affecting digital-asset regulation — can advance in Washington, which is one reason sector participants track midterm outcomes as part of the industry's policy backdrop.

Rally Triggers $1 Billion in Liquidations

The rally caught the futures market by surprise, wiping out traders on both the bullish and bearish sides. According to Coinglass data, the crypto market saw roughly $1 billion in liquidations over the past 24 hours. Liquidations occur when exchanges automatically close leveraged positions whose collateral can no longer cover potential losses, and clusters of them can amplify price moves in either direction. Long traders had $431.87 million worth of positions wiped out, while short traders absorbed $569 million in losses, underscoring how the day's move hit both sides of the trade — a two-sided tally consistent with prices moving sharply in both directions during the window.

Bitcoin was the most affected token, with $406 million in BTC positions liquidated, followed by $243.5 million in ETH positions. Short trades accounted for 76% of BTC liquidations, compared with 55% for ETH. In total, more than 134,500 traders were liquidated in 24 hours, and the largest single position was a $38 million ETH-USDT position on HTX.

Short traders took the biggest overall hit, accounting for 57% of the liquidated value. The data reflect the limbo the market currently finds itself in — a condition also captured by the Fear & Greed Index, which stood at 42 out of 100, in neutral territory. The index runs from 0, indicating extreme fear, to 100, indicating extreme greed, so the reading places sentiment just below the midpoint.

Glassnode Sees a 'Healthier Reset'

Analysts at Glassnode described Bitcoin's recent performance as a "healthier reset." In a post on X, they noted that 97.6% of short-term BTC holders were in profit around early October, a level that represents a sell signal. However, the 10% pullback from the September high has cut the share of short-term-holder Bitcoin in profit to 38%, leaving the majority of this cohort in loss — a position the analysts view as healthier for the market. The metric tracks how much recently moved supply is held at a gain, offering a read on whether newer buyers are sitting in profit or loss.

"The market is far less stretched than it was a month ago," the Glassnode analysts wrote, adding: "Should the share recover above 50% while price holds, it would show newer buyers back in profit and regaining confidence."

The analysts added that Bitcoin is now retesting the levels it broke above in August, a normal occurrence after breakouts. They also highlighted that the recent pullback cleared most of the long leverage built up in August. Short positions, however, now sit above the current price, with the largest cluster around $87,000 — a buildup of higher shorts that could further push the price toward that level. Their commentary leaves two reference points for coming sessions: the 50% short-term-holder profit-share threshold and the $87,000 cluster of short positions sitting above spot.

This article provides market information, not investment advice. Cryptocurrency prices and leveraged positions carry substantial financial risks.

This article originally appeared on The Market Periodical.