Bitcoin fell to $75,653 overnight and recovered almost the entire drop in eleven hours. This is a seven-week low. The plunge coincided with the vote count in the US Congressional elections.
Congressional elections take place mid-way through the presidential term. Which laws pass, including those on the crypto market, depends on the balance of power in the Senate and the House of Representatives.
Why this matters to a trader. The entire crypto market followed BTC: ETH and SOL rose along with it.
What did the move look like?
- $75,653 - the bottom, recorded at 06:09 Moscow time
- $78,195 - the price by 17:09 Moscow time, up 1.93% over the day according to TradingView
- $2,542 or 3.36% - recovered from the overnight low
- $79,000 - the day reached this level
Below Friday's level. Overnight the price went below $76,100 - Friday's mark after the Binance hack.
BTC was cheaper only on September 15, at $74,887.50. S&P 500 futures and gold gained about 3% over the same overnight window.
Why did the market jolt?
Two reasons are cited.
- The balance in Congress. The Associated Press called the Senate for the Democrats late on Tuesday evening, and the House of Representatives early on Wednesday morning.
- Risk to the law. Tim Sun, a senior researcher at HashKey, told Reuters that under the Democrats a crypto market structure law could get stuck.
- Waiting for regulators. Investors are also waiting for new cases from the SEC and CFTC. These are the US regulators of the securities and derivatives markets.
An old pattern played out. Santiment pointed to "sell the rumor, buy the fact," and the hours are closer to the second version: the low happened hours before the results were announced.
What about the crypto market law?
It was already stalled. The CLARITY Act failed a procedural vote on September 15, not gathering the required 60 votes in the Senate.
- 6% - the chance of such a law being passed before January 1, 2027, according to Kalshi
- $10.2 million - the turnover of this contract on the platform
Kalshi is a regulated event betting platform.
Meanwhile, the agencies are loosening their grip. The CFTC approved the first US regulated perpetual Bitcoin futures and issued Coinbase a no-action letter.
What are the funds showing?
About $1.16 billion left US spot Bitcoin exchange-traded funds over three sessions. Through such funds, BTC is bought like a stock.
- $643.33 million - October 30
- $398.62 million - November 2
- $115.56 million - November 3, 82% less than the first day
Key point: outflows are shrinking, and the fund complex holds $99.16 billion - that is 6.33% of Bitcoin's $1.58 trillion market cap. The dates of votes on the law are worth keeping in the economic calendar.
Did you trade this overnight candle?
Night, vote counting, a plunge to $75,653 and a recovery in eleven hours. Some were in it, some watched from the sidelines and did the math in their heads. A 3.36% move from the bottom on a two-thousand-dollar account is $67 before commissions. A prop firm gives a trader its trading nominal under strict risk rules and leaves them the bulk of the result. The path from selection to the first payout is better worked out before the next such night.