The crypto market rose after the US midterm elections. On the evening of November 4, BTC was worth about $80,500, ETH gained almost 6%. The Democrats regained control of both chambers of Congress, and the market took this result calmly.
Midterm elections are a vote on the composition of Congress in the middle of a presidential term. Congress writes laws, including on crypto regulation, so the market prices in its composition through quotes.
For a trader, growth is not the only thing that matters. Over the day, $469 million in leveraged positions were forcibly closed, and that is the price of being on the wrong side on such a night.
How much did assets grow?
Growth across the entire first tier. As of the evening of November 4, BTC was trading around $80,500 (+3.5%) and was approaching $81,000.
- ETH - up almost 6%, to $2,433
- Solana and XRP - 2.5% each
- TRUMP - the memecoin lost 17%
Crypto-sector stocks followed. Strategy and Coinbase gained about 6%, Block after its report - 15%, Strive - 12%. Strategy's STRC preferred shares reached $100 for the first time since May.
Strategy is Michael Saylor's company, the largest corporate holder of BTC.
Why did the market turn around?
The reason is the outcome of Tuesday's elections. The Democrats regained control of both chambers of Congress.
- The first reaction was downward. In the first vote counts, futures fell as much as 2.5%.
- The dip was fully bought back. By evening the market had returned above pre-vote levels.
- Analysts' assessment. "Markets took the Democratic victory calmly," wrote analysts at the crypto platform Nexo.
What does this mean for a trader?
Almost no fresh money came into the market. Crypto futures trading volume rose by 27%, while open interest rose by only 3%.
Open interest is the sum of all open futures positions.
- Repositioning. According to Nexo, traders moved existing positions; almost no fresh leverage came in
- $469 million - the volume of liquidations over the day
Liquidations are the forced closing of leveraged positions.
Key point: a 3.5% move without an inflow of new leverage rests on the reshuffling of old positions. You can check which trading style and market to take a challenge on in the calculator.
What happens next?
A separate story is the $6.3 billion Binance hack. Bitwise CIO Matt Hougan analyzed the 10 largest crypto hacks. Thirty days after five of them, BTC was higher; after five, lower.
The reaction was muted. BTC then fell by about 4%, as did other risk assets.
November reference points were named by Matt Mena, crypto strategist at 21Shares:
- Support zone. Whether BTC holds $76,000-78,000.
- Consolidation zone. Whether it consolidates above $80,000-82,000.
- Question for Binance. Whether the exchange completes payouts and confirms reserves.
Upcoming dates on macro are convenient to check in the economic calendar.
Were you long when they were counting votes?
The night of vote counting played out by the classic script. First minus 2.5% on futures, then a five percent run-up on ETH. Guessing the side was only half the battle; the other half was the volume you sat in it with. On a thousand-dollar deposit, such a reversal yields enough for dinner. prop trading works differently: the trading notional is allocated by the company, the trader passes its selection based on risk limits and takes an agreed share of the result. It is worth understanding the scheme before the next such night.