Bitcoin (BTC) climbed back above $80,000 at Wednesday's Wall Street open as US stocks surged in the wake of a Democratic sweep in the midterm elections.

Midterm elections, held halfway through a US president's four-year term, determine the makeup of Congress, the body responsible for passing legislation and controlling federal spending.

Key points:

• Bitcoin jumped past $80,500 at the start of Wednesday's Wall Street session as risk assets gained on the US midterm election results.
• S&P 500 futures rebounded from a three-month low of 7,490 points, a move trading resource The Kobeissi Letter described as a "textbook bear trap."
• Hopes for an end to the US-Iran war sent WTI crude oil below $93 per barrel.

Analysts eye BTC "relief rally" after midterms

Data from TradingView showed BTC/USD up by more than 4%, having bounced from a seven-week low under $76,000 earlier in the week.

US stock futures made swift gains on Wednesday after initially dipping overnight. S&P 500 futures, derivative contracts tied to the benchmark US equity index that trade nearly around the clock, fell as low as 7,490 points — their lowest level since July 31 — before recovering to 7,690 points, approaching new month-to-date highs.

In its latest analysis on X, trading resource The Kobeissi Letter called the initial equities weakness that accompanied news of the Democratic gains a "textbook bear trap," a pattern in which an apparent downturn quickly reverses and wrong-foots traders positioned for further losses.

"This marks one of the largest shifts in US political power in nearly two decades," it added, noting that the Democrats had flipped seven seats in the Senate and 25 in the House of Representatives.

In comments sent to Cointelegraph, James Butterfill, head of research at crypto asset manager CoinShares, said fading election uncertainty could set the stage for a wider Bitcoin "relief rally," a term for a rebound in prices after a period of sustained declines.

"For Bitcoin, real yields, dollar liquidity and ETP flows still carry more weight than the elections," he wrote, referring to Bitcoin exchange-traded products. "We are seeing oil prices plummet, relieving some inflationary pressure, and consequent rate hike expectations could moderate."

Exchange-traded products are listed instruments that give investors exposure to Bitcoin without requiring direct ownership of the asset, and their flows are widely tracked as a gauge of demand. Real yields, which measure bond returns after inflation, and dollar liquidity, the supply of US dollars available in the financial system, are macro variables investors commonly monitor alongside crypto-specific data. In Butterfill's view, those gauges are the ones to watch as the post-election environment unfolds.

Iran war optimism sends WTI crude to three-week low

Iran's reaction to the Democratic gains helped push US WTI crude oil prices to their lowest levels since mid-October. WTI is the US crude benchmark, while Brent is the international standard for global oil pricing.

In an X post, Iran's speaker of parliament, Mohammad Bagher Ghalibaf, wrote that voters had "said NO TO WAR, and we endorse this message."

WTI dipped below $93 per barrel, down as much as 11.9% for the week, while Brent crude approached sub-$100 levels for the first time since Oct. 7.

Earlier on Wednesday, US President Donald Trump conceded that the Iran conflict was partly responsible for the Republicans' election losses.

Economist Robin Brooks said oil markets had priced in a risk premium that was "too high" ahead of the midterms. "The key question now is whether this causes the President to dial back on war with Iran or whether he escalates," he wrote in a blog post. His question frames the near-term watch point for oil markets in the wake of the vote.

This article was originally published by Cointelegraph.