Bitcoin rockets above $80,000 for first time since Binance hack despite Democrats sweep, but a historical crash looms

Bitcoin surged more than 5% from its election-night low to reclaim $80,000 for the first time since Binance’s record hack.

The cryptocurrency extended its recovery from approximately $75,600 on Wednesday, shaking off concerns that Democrats’ takeover of Congress would undermine President Donald Trump’s crypto-friendly agenda.

According to CoinGlass data, this rally liquidated $453.32 million in the past hour, with most of the losses coming from short traders. These losses reach $913.34 million over the past 24 hours.

The rally comes less than a week after Binance suffered a $6.34 billion security breach that sent shockwaves through the digital asset market, triggering withdrawals and intensifying an already difficult period for Bitcoin investors.

James Butterfill, head of research at CoinShares, told CryptoSlate that the Democratic sweep had largely been priced into Bitcoin before the election, creating room for a relief rally as political uncertainty dissipated.

His assessment reflects a growing distinction between the potential consequences of divided government for the wider crypto industry and Bitcoin itself.

Butterfill expects Democratic control to complicate efforts to advance the CLARITY Act, while potential investigations into Trump-linked cryptocurrency businesses could divert political attention from regulatory reform.

However, he argued that exchanges, token issuers and other companies requiring new regulatory permissions would be more vulnerable to those developments than Bitcoin.

He said that the cryptocurrency’s direction remains more closely tied to real yields, dollar liquidity and exchange-traded product flows.

The broader financial markets have already begun reflecting that shift in attention.

According to institutional trading platform Talos, Bitcoin’s DVOL, a gauge of expected volatility, declined 6%, while Wall Street’s VIX fell 10% as reduced uncertainty encouraged systematic buying across risk assets.

The retreat in volatility coincided with a weaker dollar and declining Treasury yields, providing a more favorable backdrop for Bitcoin’s recovery.

BTC sellers are running out of ammunition

On-chain data suggests the rally is arriving as the selling pressure that dominated Bitcoin’s recent decline begins to weaken.

CryptoQuant analyst Darkfost said the firm’s seller exhaustion model has fallen to levels historically associated with bear-market lows.

The indicator compares the proportion of Bitcoin supply held at a profit with average monthly volatility to assess whether existing holders still have enough incentive to keep selling.

Its latest reading follows a correction of more than 10% from Bitcoin’s previous high, during which short-term holders appear to have realized profits and reduced their exposure.

Previous episodes of similarly depressed selling activity have coincided with the formation of market bottoms, although the indicator offers no assurance that prices will immediately recover.

Darkfost identified a critical weakness in the current market: buyers have yet to demonstrate the same conviction as the sellers who recently exited. He said:

“Even if sellers have calmed down, demand is still needed, and Bitcoin is still short of it.”

That concern is especially relevant after three consecutive trading sessions of withdrawals from US spot Bitcoin ETFs, which have deprived the market of an important source of institutional demand.

While the retreat in selling pressure has allowed Bitcoin to recover above $80,000, sustaining that advance will require fresh capital to absorb any renewed profit-taking.

Bitcoin’s perfect midterm record conceals a nearly 50% crash

Bitcoin’s latest recovery also coincides with a historical pattern that has delivered substantial gains following every US midterm election since 2010.

CryptoQuant data shows the flagship crypto asset has risen over the subsequent 12 months in all four election cycles, generating a median return of 63%.

Those gains occurred under different political arrangements, including the 2018 midterms, when Democrats captured the House while Republicans retained the Senate.

Bitcoin gained 45.8% over the following year, while the comparable returns after the 2014 and 2022 elections reached 36.8% and 80.8%, respectively.

However, those annual figures conceal significant losses suffered by investors who bought immediately after the votes.

Bitcoin plunged 49.7% within approximately six weeks of the 2018 election before recovering. The cryptocurrency suffered a 39.8% drawdown following the 2014 vote and an 18.5% decline after the 2022 midterms, when the collapse of FTX destabilized the market.

The apparent election effect also coincides with another recurring feature of Bitcoin’s history.

US midterms occur every four years, roughly matching Bitcoin’s halving schedule. CryptoQuant found that each election since 2010 occurred about 17 to 25 months before the next halving.

The 2014, 2018 and 2022 votes followed major bear markets, meaning the subsequent rallies unfolded as Bitcoin emerged from steep declines.

That relationship faces a different test in 2026.

Bitcoin entered Tuesday’s election with a 20.4% gain over the preceding three months, compared with losses of 44% in 2014, 8.3% in 2018 and 16.5% in 2022.

That leaves this year’s market in a materially different position from the previous three cycles, potentially weakening the relevance of the historical post-election returns.

Talos’ seasonal figures provide another complication. Bitcoin lost 7.4% in October, and November subsequently recorded declines in three of the five previous years when October ended lower, including 2018 and 2025.

That is why Kelly Ye, Talos’ head of research, cautioned against extrapolating the initial relief rally into a sustained recovery. She said:

“First reactions aren’t always the right ones.”