Bitcoin price recovered above USD 78,000 on Wednesday after falling below USD 76,000 during the U.S. midterm election count. TradingView data showed Bitcoin falling to USD 75,618, its lowest level since September 16. The cryptocurrency later recovered to USD 78,154.44, gaining 2.04% over 24 hours.
However, the recovery followed several days of selling in U.S. spot Bitcoin funds. The cryptocurrency also remained below its October highs near USD 86,000.
Bitcoin Price Recovers After Election-Night Selloff
Bitcoin approached USD 78,000 late Tuesday before turning lower as initial election returns arrived. The decline pushed prices below USD 76,000 and forced traders holding leveraged bullish positions to close their trades. CoinGlass data showed USD 288 million in crypto long liquidations over 24 hours.
Meanwhile, U.S. stock futures also weakened before recovering part of their losses. S&P 500 futures were down around 0.3% on Wednesday, while Nasdaq futures reduced earlier declines. Investors were also assessing concerns over rising spending on artificial intelligence infrastructure.
Kelly Ye, head of research at Talos, said markets had largely prepared for the election outcome. She noted that Bitcoin’s initial 1.7% move was close to the 1.8% change implied by options prices.
“The election was the main event, but markets had largely prepared for it,” Ye said.
Democratic Congress Brings Crypto Legislation Back Into Focus
Democrats won control of both chambers of Congress following Tuesday’s midterm elections, reversing Republican majorities. The party flipped at least seven Senate seats and more than two dozen House districts. However, counting continued in several individual races on Wednesday.
The results will give Democrats greater control over the congressional agenda when the new Congress convenes in January. Nevertheless, the election outcome does not determine whether lawmakers will approve or reject pending cryptocurrency legislation.
The CLARITY Act remains a central issue for the crypto industry. The proposed legislation seeks to establish federal rules for cryptocurrency trading and regulatory oversight. However, a Senate procedural vote failed to advance the bill in September.
Some Democratic lawmakers have since expressed interest in restarting negotiations. Their concerns include provisions addressing public officials’ cryptocurrency interests and the responsibilities of federal regulators.
Bitcoin Faces USD 78K Resistance as ETF Withdrawals Persist
Bitcoin’s recovery brought prices toward resistance between USD 78,000 and USD 78,231. Meanwhile, immediate support remains near USD 77,000, followed by the USD 76,930 Fibonacci level. A decline below these levels could expose the next support around USD 76,185.
Keith Alan, co-founder of Material Indicators, identified Bitcoin’s 50-week moving average near USD 75,733 as an important level. He warned that failure to defend this support could trigger a “deeper correction ahead.”
Similarly, analyst Rekt Capital identified USD 75,500 as a possible downside target if Bitcoin continues forming lower highs.
Institutional selling also remained a concern. Data from SoSoValue showed U.S. spot Bitcoin ETFs recorded USD 115.56 million in net outflows on November 3. This followed withdrawals of USD 398.6 million on November 2 and USD 643.3 million on October 30.
The three sessions recorded combined withdrawals exceeding USD 1.15 billion. However, Tuesday’s outflows were smaller than those recorded during the previous two trading sessions.
Bitcoin’s next price movement will depend on whether buyers can defend the USD 77,000 support level and overcome resistance near USD 78,300. Further ETF flow data will provide additional evidence of institutional demand following the election.
ALSO READ: Bitcoin Faces USD 76,000 Support Test Amid ETF Outflows, Chip Stock Sell-Off
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