CryptoSlate
Bitcoin climbed above $81,000 alongside gold after the US midterm elections, but a $378 million short squeeze complicates the case that investors are buying scarce assets to hedge dollar debasement. Gold futures gained 3.4% to $4,061.10, while the dollar weakened and Treasury yields fell.
The wider rally also included a 1.6% rise in the S&P 500 and a 3% gain in the Dow. That points to easing political uncertainty and lower yields as possible drivers, not just a shift toward Bitcoin and gold as stores of value.
Why it matters
Bitcoin’s rebound came as traders covered bearish positions: about $378 million in crypto shorts were liquidated within an hour, accounting for roughly 81% of liquidations in that period. Short covering forces traders to buy back positions and can amplify a rally without establishing that new spot buyers are driving it.
CoinShares research head James Butterfill said Bitcoin had already priced in much of the Democrats’ election victory, leaving room for a recovery after uncertainty faded. The broader context is mixed: US spot Bitcoin ETFs recorded $1.16 billion in withdrawals over the three sessions before the rebound, then took in $74.6 million on Nov. 4.
Market impact
ETF flows were uneven. Fidelity’s FBTC received $236.7 million on Nov. 4, while BlackRock’s IBIT lost $201.2 million. The daily return to inflows ended the losing streak but did not make up for the earlier withdrawals. Bitfinex also found limited evidence of aggressive spot buying behind recent Bitcoin recoveries.
Price levels give the rebound a near-term test. Glassnode identified $77,700 as the average cost basis of active investors and $75,700 as additional support; a sustained break below $73,000 would threaten the recovery. On the upside, Bitfinex flagged $84,000–$85,500 as a potential selling zone, while Glassnode identified a concentration of possible short liquidations near $87,000. Friday’s US employment report could shift rate expectations and test the lower-yield conditions that supported the move.
Frequently asked questions
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How much of the crypto liquidation total came from short positions?
About $378 million in bearish crypto positions were liquidated within an hour, and short positions accounted for roughly 81% of liquidations in that period.
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Did Bitcoin ETF inflows recover the withdrawals before the rebound?
No. US spot Bitcoin ETFs took in $74.6 million on Nov. 4 after $1.16 billion in withdrawals over the preceding three trading sessions.
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Which Bitcoin price levels are identified as support?
Glassnode identified $77,700 as the average cost basis of active investors and $75,700 as additional support. A sustained decline below $73,000 would threaten the recovery.
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Where could Bitcoin holders sell into a further rally?
Bitfinex identified $84,000 to $85,500 as a potential selling zone. Glassnode also flagged possible short liquidations near $87,000.
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What upcoming event could test the conditions behind Bitcoin's rebound?
Friday’s US employment report could alter interest-rate expectations. A stronger-than-expected labor market could put upward pressure on Treasury yields.
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