Bitcoin returns to $77,000, and medium- to long-term trends are optimistic after the midterm elections

According to Woofun AI, against the backdrop of individual stocks related to artificial intelligence leading the rise in US technology stocks, capital poured into the digital asset market at an accelerated pace, pushing Bitcoin to successfully return to the critical psychological threshold of $77,000. This price recovery not only establishes a short-term core anchor, but also reflects the spillover effect of the recovery in risk appetite in traditional financial markets on crypto assets.

Although the political uncertainty caused by the US midterm elections is still disturbing market sentiment, based on historical cycles and current technical patterns, analysts generally believe that Bitcoin has significant potential for recovery in the medium to long term, and the market is gradually finding a new balance from short-term shocks.

Judging from specific market data and capital flows, the market showed obvious characteristics of a bullish recovery. As of 8:19 a.m. on the 4th, the transaction price of Bitcoin on the Korean digital asset trading platform Upbit was 148.5 million won, up 1.17% from 9 a.m. the previous day; on the world's leading trading platform Binance, the price of Bitcoin rose 1.32% from 24 hours ago to $77,861. Mainstream altcoins also performed strongly, with Ethereum rising 1.60% and trading at $2290; Ripple rose 2.38% to trade at $1.28.

According to Woofun AI on-chain data, a total of about $52.52 million worth of Bitcoin positions were closed in the past 24 hours, of which about 59.1%, or $31.06 million, were long positions, and the total amount of closed positions in the entire market was about US$174.45 million, indicating that leverage cleaning has basically ended.

This rebound is directly due to the strong performance of the US stock market: the day before, the Philadelphia Semiconductor Index rose 2.6% and the Nasdaq 100 index rose 0.7% in the New York stock market. Semiconductor stocks, which were previously weak due to concerns about falling profits due to large-scale investment by artificial intelligence companies, have regained buying popularity because AMD (AMD.US) and server manufacturer Ultra Microcomputer (SMCI.US) gave higher-than-expected revenue forecasts.

Additionally, Meta Platforms (META.US) successfully raised $15 billion by re-issuing corporate bonds after a six-month interval, showing strong investment demand. As US stocks stabilized, Bitcoin also broke away from the low of about $76,300 hit on the 30th of last month and rebounded to around $77,000, and price volatility decreased significantly.

However, the key variable that determines the short-term market direction is still the political uncertainty brought about by the US midterm elections. If the Democratic Party expands its seat in this election, the congressional power structure currently controlled by the Republican Party may change, thereby limiting the various policies implemented by the Trump administration. Market analysis agency Covey Letter pointed out that concerns about artificial intelligence investment alone are not enough to explain the recent weakness in US stocks. Possible major changes in the parliamentary power structure are reflected in the financial market. The market is incorporating the uncertainty associated with political changes into price considerations, and reflecting the political impasse that may continue for the next two years.

Meanwhile, the fall in international oil prices is seen as a positive factor in easing inflationary pressure. Despite further US air strikes on Iran's Qasim Island, the price of West Texas crude oil WTI still fell below $94 per barrel, and even dropped to $93.59 per barrel, the lowest level since last month 15, and the geopolitical risk premium did not soar as expected because the two sides still had the possibility of resolving the dispute through diplomatic channels.

Unlike short-term fluctuations before the midterm elections, Bitcoin's medium- to long-term trend assessments appear more optimistic. Currently, the price of Bitcoin is above the 200-day moving average, which is around $73,169. In contrast, during the 2014, 2018, and 2022 midterm elections, the price of Bitcoin was below the 200-day moving average of 35%, 9%, and 22%, respectively, and was in a long-term downtrend. However, this year's price pattern has fundamentally reversed. Historical data further supports this view: Bitcoin experienced fluctuations or slight declines in the months following the above three elections, but prices all increased 12 months after election day. Martin Lee, head of research at DWF Labs, said that although historical trends indicate that Bitcoin is expected to strengthen in the next 12 months, demand remains cautious in the short term. He warned that if the war intensifies or investment sentiment worsens in fields related to artificial intelligence, it may put pressure on risky assets, leading to increased short-term volatility. This is a critical point where the market is once again facing political and technical resonance after the previous election cycle.