According to Woofun AI, the dust settled on the US midterm election results, and the Democratic Party successfully controlled both houses of the Senate and the House of Representatives. This drastic change in the political landscape quickly spread to the digital asset market, triggering sharp fluctuations and backlash. The price of Bitcoin (BTC) fell to around $75,618 during the intraday period, then recovered strongly and stabilized at the $80,000 mark, driven by multiple factors.
Although the market generally attributes this rebound to emotional healing brought about by the elimination of political uncertainty, the deep flow of capital reveals a more complex game logic: the core driving up prices is not a surge in demand for physical purchases, but the centralized liquidation of large-scale short positions in the derivatives market.
This price increase, driven by bears' compensation, is often accompanied by a brief depletion of liquidity and insufficient subsequent momentum, causing the market to remain highly cautious and divided even after the carnival.
Judging from macroeconomic market performance, the shift in political trends has indeed injected a dose of strength into the market, but the actual behavior of capital showed a clear divergence. On the 4th (local time), the total market value of global digital assets climbed to US$2.69 trillion, up 3.11% from the previous day; trading volume surged to US$90.9 billion during the same period, an increase of 44.37%, of which Bitcoin transactions accounted for 60.1%.
However, data compiled by Woofun AI shows that in the derivatives market, the total amount of closed positions in the last 24 hours reached US$936.1 million, of which the closing amount of short positions accounted for US$533.2.8 million. Citing CoinGlass data, Bitcoin.com further stated that the amount of shorted and closed positions on Bitcoin alone was approximately US$370 million.
Meanwhile, the overall value of open positions fell 4.36% to $347.73 billion. The comparison of this set of data is extremely alarming: the sharp increase in trading volume was not accompanied by an increase in open positions, but rather a significant contraction. This clearly shows that the current price rebound is mainly due to the liquidation of existing positions and short losses, rather than a substantial influx of new capital. Without continued support from new purchases, this rise driven by bears is unlikely to be sustainable in the long term.
In terms of specific token performance, the market showed a trend of general rise but increased fragmentation. Bitcoin (BTC) is up 2.99% from the previous day, trading at a fixed price of $81,119.94. Ethereum (ETH) showed a stronger performance, rising 5.61% and trading at $2416.04. Among other mainstream assets, Binance Coin (BNB) rose 2.42% and traded at $715.50; Ripple (XRP) rose 2.14% and traded at $1.30; SOL rose 1.57% and traded at $94.81; ZEC saw the most significant increase, reaching 6.48%, trading at $1291.79; and Dogecoin (DOGE) rose 2.28% to trade at $0.07680. In contrast, there was a correction in some assets, and TRX (TRX) fell 1.11% and traded at $0.3196; HYPE fell 2.00% and traded at $83.64.
This differentiation reflects the selectivity of capital in terms of risk appetite, as well as differences in the fundamentals and market sentiment of different projects.
The opinions of market experts are clearly polarized at this moment, reflecting deep differences over future market trends. Digital asset analyst Ted Pillows said on the X platform that Bitcoin has absorbed recent negative factors, formed a solid bottom, and predicts that the third or fourth quarter of next year is expected to reach new highs. Cryptogoos sees the reconfirmation of the 50-week moving average as a key sign that the market is beginning to recover. CryptoMichnl anticipates that Bitcoin is likely to continue its strong upward momentum until the end of the year as uncertainty clears up after the midterm elections.
However, Bitfinex analysts issued a stern warning, pointing out that demand for physical purchases is not strong, and capital inflows to US Bitcoin spot ETFs are also weakening. Their analysis suggests that if the daily closing price falls below the key support level of $75,839, Bitcoin is likely to fall further to the $70,000 to $75,000 range. In the options market, demand for put options is more than double that of call options, which further confirms that the market is wary of downside risks. The CoinMarketCap Fear and Greed Index, which reflects investor sentiment, is 42 and is at a “neutral” level. In the future, the market will focus on the US CPI (Consumer Price Index) data and the Federal Reserve's monetary policy trend. These macro variables will be the key to determining whether the market can break through the current volatile pattern.