Bitcoin Reclaims $80,000, Riding Relief Rally as U.S. Midterm Uncertainty Eases

Bitcoin has reclaimed the $80,000 level following the Democratic Party's victories in both chambers of Congress during the U.S. midterm elections, which have alleviated concerns about future policy direction. President Donald Trump has reportedly accepted the election results and expectations for an early conclusion to the U.S.-Iran war have grown, fueling a "relief rally" across the cryptocurrency market.

As of 8:10 a.m. on November 5, Bitcoin was trading at approximately $80,725 on Bithumb, a domestic exchange, marking a 1.76% increase from the previous day. Similar gains were observed in global markets, with Bitcoin rising 3.67% to $80,641, regaining the $80,000 threshold. Ethereum and Solana also experienced significant gains, surging 2.32% and 0.63%, respectively.

However, not all cryptocurrencies benefited equally; XRP experienced a 0.34% drop, indicating a mixed performance. The primary catalyst behind this rebound is the reduced uncertainty resulting from the midterm election outcomes. Democrats' control of Congress is anticipated to lead to more coordination and negotiation between the legislature and executive branch in shaping major policy initiatives.

Additionally, expectations of an early end to the Middle East conflict have contributed to a decline in international oil prices, with West Texas Intermediate (WTI) crude closing down 8.29% at $88.12 per barrel. U.S. equity markets, including the Dow Jones Industrial Average and the S&P 500, also surged, boosting investor sentiment.

Notably, some cryptocurrencies tied to President Trump and his family, such as TRUMP and World Liberty Financial (WLFI), suffered losses. The CLARITY Act, a bill designed to establish a regulatory framework for digital assets, may face delays or fail to progress due to Democrats' desire for stronger ethics provisions. Despite the price rebound, the overall market sentiment remains cautious, with the cryptocurrency Fear and Greed Index standing at 34, indicating fear.

The "kimchi premium" on major exchanges also remains positive, suggesting that Bitcoin and Tether are trading at higher prices on domestic exchanges compared to overseas markets. However, some experts caution that the rally may be a "bear trap" and advise caution before concluding that the downward trend has definitively ended.