Bitcoin fell to around $75,600 as US midterm results came in, then rebounded to just over $78,000. One analyst says the dip landed near a key on-chain support level, while another expects a possible revisit of the $56,000 bear-market low.
Bitcoin fell to its lowest price in almost 7 weeks at around $75,600 as the US midterm results initially rattled risk markets. The sell-off was short-lived, however, and the asset rebounded to just over $78,000 as of press time as political uncertainty faded and buyers stepped back in.
Democrats win both chambers
Democrats won control of both the House and the Senate in Tuesday's midterm elections, which hands President Donald Trump a divided government for the final two years of his term. They also flipped several seats in traditionally Republican states.
Bitcoin's first reaction was negative. The asset was rejected at $77,000 and dropped to $75,600, its lowest level since September 17. Nasdaq 100 futures also plunged in the early election reaction, while the dollar weakened and Treasury yields fell.
The concern for crypto is that Democratic control of Congress could complicate parts of the Trump administration's pro-industry legislative agenda and increase scrutiny of areas such as technology and financial regulation. At the same time, the outcome is likely to create gridlock because Trump retains veto power over legislation passed by Congress.
Buyers return during the rebound
The initial fear faded, and bitcoin erased most of its losses. According to market commentators, the political outcome reduced uncertainty, while significant call-option buying also emerged during the rebound.
Analysts disagree on what comes next. Crypto analyst Bren believes BTC might revisit the $56,000 bear-market low. Ali Martinez pointed to bitcoin's short-term holder realized price, which sits around $75,800, and said the latest leg down brought the asset almost directly into that zone.
Source: CryptoPotato
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