Bitcoin rebounds after Democratic sweep as ETF outflows persist

Bitcoin rose above $78,000 on Wednesday after briefly falling below $76,000 as Democrats won control of Congress. U.S. spot Bitcoin exchange-traded funds recorded about $1.16 billion in net outflows over the three trading sessions ending Nov. 3.

The withdrawals totaled $643 million on Oct. 30, $399 million on Nov. 2 and $116 million on Nov. 3, according to Farside Investors. BlackRock’s IBIT recorded $95 million in outflows on Nov. 3.

The election added to concerns about cryptocurrency policy in Washington. The Senate rejected a procedural motion to advance the CLARITY Act on Sept. 15 in a 49-50 vote, short of the 60 votes required. The bill would define the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission in overseeing digital assets.

Bitunix analysts expect Democratic control to shift congressional attention toward investigations into conflicts of interest, cryptocurrency exchange oversight and broader financial risks. Some Democratic lawmakers have supported digital asset legislation. The new Congress will take office in January 2027.

Before the election, Ryan Kirkley, co-founder and chief executive of blockchain infrastructure company Global Settlement Network, forecast that Bitcoin could recover to between $85,000 and $90,000 regardless of the result. His forecast depended on stabilizing ETF flows, improved liquidity and a recovery in economic confidence.

“My view is that investors are probably giving Washington too much credit for Bitcoin’s direction,” Kirkley said.

A pre-election survey found that respondents expected a lower year-end Bitcoin price under a Democratic sweep. The median forecast was $76,450 in that scenario, compared with $84,100 under divided congressional control and $90,800 if Republicans retained both chambers.

Bitcoin’s social sentiment weakened before the election. Santiment reported that the ratio of bullish to bearish Bitcoin commentary fell from about 1.8 on Oct. 20 to 0.51 as Democrats moved toward control of Congress. The ratio briefly dropped to 0.37 after Binance suffered a security breach estimated at about $6 billion in late October.

Glassnode estimated that about 4 million Bitcoin held by long-term investors last changed hands between $85,000 and $118,000. Those holdings could add to selling pressure if Bitcoin returns to those levels. The firm identified $84,000 to $85,000 as a resistance area and estimated the combined cost basis of U.S. spot Bitcoin ETF holdings at about $81,500.

Glassnode said Bitcoin would need to rise above $87,500, alongside repeated ETF inflows and higher trading volumes, to provide stronger evidence that buyers are absorbing available supply. The firm estimated the short-term holder cost basis at about $75,800.

21Shares identified support between $75,800 and $76,200 in its Nov. 3 outlook. Bitcoin’s 200-day moving average was near $73,000. ETF flows after the election will indicate whether investors resume buying or extend the recent selling as Bitcoin attempts to reclaim $80,000.