Crypto market and US stocks reversed upward after the midterm elections. On the morning of November 4, Bitcoin dropped below $76,000, that is, to a seven-week low. By the opening of the US session, it was bought back above $80,500.
At the same time, oil became cheaper. The war premium left its price - the markup that traders pay out of fear of conflict. When such a premium deflates, money returns to risk assets: crypto and stocks.
For a trader this means one thing: in a single session, the market went from panic to monthly highs.
How strong was the rebound?
- $80,452 - BTC price by the opening of the US session, plus 3.62% in a day
- above $80,500 - the peak of the move
- below $76,000 - the seven-week low from which the buyback began
- $2,435 - ETH price, plus 5.95% over the same day
The picture is the same in stocks. S&P 500 futures fell to 7,490 points, a low since July 31. Then they rebounded to 7,690 - almost to the upper boundary of the month.
Why did the market reverse?
- Election results. According to Kobeissi Letter's count, Democrats took 7 Senate seats and 25 House seats. The same source called the preceding stock decline a "classic bear trap."
- Deflated oil premium. WTI lost up to 11.9% over the week and fell to a low since mid-October. Brent approached $100 for the first time since October 7.
- Inflated fear before the vote. Economist Robin Brooks believes the pre-election risk premium was overestimated.
What does this mean for a trader?
The price rose, but money was leaving funds. $1.16 billion was withdrawn from exchange-traded funds over the latest period. An exchange-traded fund is an instrument through which Bitcoin is bought like an ordinary stock.
Key point: James Butterfill, head of research at CoinShares, links the potential for further growth not to the elections, but to real yields, dollar liquidity and flows into these funds.
What's next?
The open question for the coming weeks is Iran. Whether the White House will move toward de-escalation of the conflict is not yet clear. It is this topic that drives oil, and with it the appetite for risk.
- Oil - the main indicator to watch
- Flows into funds - a signal of real demand for BTC
- Macro statistics - dates are in the economic calendar
Did you see this buyback from $76,000?
The overnight plunge and the 4% return in a single session are worked off by volume, not by precision of entry. On a personal two or three thousand dollars, this entire BTC surge will produce a sum that won't be enough to pay for internet. In prop trading, the trading notional is allocated by the company: first its risk-based selection, then its account and a fixed share of the result for the trader. It's easier to understand this scheme in a calm market. On the night of the next shakeout there will be no time.