Bitcoin climbed back above $80,000 after Democrats won the US midterm elections, helped by short liquidations. Arthur Hayes still sees near-term downside risk from the AI-sector selloff, and CoinDesk reports that leverage and spot demand remain weak.
Bitcoin traded at $79,676 on November 5, up 2%, after appetite for risk assets returned following the Democratic Party's midterm win. The move came with the biggest daily gain since September 21, when the price went from $75,700 to touching $81,000.
Short liquidations fuel the rebound
Derivatives played a large part in the rally. CoinJournal reports that about $694.40 million in leveraged positions were liquidated over 24 hours, and short positions made up most of them.
US spot Bitcoin ETFs took in $74.57 million on Wednesday, ending three consecutive days of outflows.
CoinDesk, however, points to weak signs beneath the surface. Bitcoin futures open interest held largely unchanged at $53.40 billion, according to Coinglass, which suggests little fresh leverage is entering the market. The Coinbase Premium indicator also remains negative.
Hayes warns of AI-selloff risk
Arthur Hayes, co-founder of Maelstrom, remains bearish on the near term. He argues that as traders keep selling AI stocks, the selloff could weaken Bitcoin and other crypto prices.
His outlook applies only to the short term. Hayes believes an AI-industry crisis could push central banks to trim interest rates, which would be bullish for Bitcoin in the long run.
Chart levels around $80,000
Bitcoin has stalled at $80,000 once again, a price that coincides with the 61.8% Fib level of $80,190. If support holds and Bitcoin makes three daily closes above it, the price could move to $82,900 next.
Losing that support could send Bitcoin lower to $78,200. CoinJournal puts the next major resistance at $85,000.
Sources: CoinGape, CoinJournal, CoinDesk
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