Bitcoin tops $80k as $694m liquidation wave fuels recovery toward $85k

Key Takeaways

• Bitcoin (BTC) pushed past $80,200 on Thursday, continuing its rebound after moving back above its 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs).
• U.S. spot Bitcoin ETFs registered $74.57 million in net inflows on Wednesday, breaking a three-day streak of capital withdrawals.
• The market faces key resistance near $85,000, while the 50-day EMA around $80,172 serves as immediate downside support.

Bitcoin (BTC) broadened its recent rally on Thursday, rising above $80,200 as market sentiment brightened, fueled by short-side liquidations and fresh capital entering U.S. spot Bitcoin exchange-traded funds (ETFs).

The premier cryptocurrency hovered near $80,200 after finishing the prior trading session above key exponential moving averages.

This upward move followed a period of intense volatility across crypto derivatives, which saw roughly $694.40 million in leveraged positions wiped out within a 24-hour window.

Short trades made up the majority of those liquidations, indicating that traders betting against the market were forced to close out positions as Bitcoin crossed back over the psychological $80,000 mark.

Institutional interest also demonstrated initial signals of stabilization, as spot Bitcoin ETFs pulled in $74.57 million in net inflows on Wednesday following three straight days of outflows.

At the same time, the outcome of the U.S. midterm elections helped buoy appetite for risk assets, reinforced by falling crude oil prices and declining bond yields.

Bitcoin rebounds as US Midterm election results lift risk appetite

Bitcoin’s upward momentum built following the U.S. midterm elections, in which Democrats captured control of both the Senate and the House of Representatives.

The election outcome created a divided government, which could hinder President Donald Trump’s ability to push through specific legislative and fiscal initiatives without congressional support.

Market participants were also weighing the implications for U.S. foreign policy, particularly regarding the ongoing conflict involving Iran.

On Wednesday, Senate Democratic Leader Chuck Schumer stated that his party would work toward ending the war with Iran, potentially using control over federal funding as leverage.

These political shifts fueled expectations that the threat of further military escalation might recede.

Even so, the election results do not ensure a shift in military stance, and uncertainty regarding the conflict persists.

Bitcoin’s rise past $80,200 unfolded alongside these geopolitical developments, though derivative market mechanics provided significant support to the advance.

A sharp unwinding of leverage accelerated Bitcoin’s price gains. Data from CoinGlass shows that roughly $694.40 million worth of crypto derivatives positions were liquidated over the prior 24-hour timeframe.

Short positions represented about 70% of that total, coming to roughly $556 million. This imbalance underlines that bearish speculators bore the heaviest losses during the market’s recovery.

Bitcoin reclaims major moving averages

Bitcoin’s daily technical picture has brightened after the asset moved back above its 50-day, 100-day, and 200-day exponential moving averages.

BTC was trading around $80,200 on Thursday, holding above the 50-day EMA at $80,172. Meanwhile, the 100-day EMA sits at $77,904, and the 200-day EMA is positioned near $76,547.

Exponential moving averages give greater weight to recent price data, helping traders identify overall market trends.

Trading above these metrics signals that Bitcoin has restored essential technical support following its recent decline.

Nonetheless, Bitcoin’s immediate hurdle is sustaining its position above the 50-day EMA. Maintaining a level above $80,172 would reinforce the recovery case and signal that buyers are defending this key technical threshold.

Conversely, failing to hold this level could reignite selling pressure and raise the odds of a pullback toward lower support areas.

Daily chart momentum indicators also show improving market conditions. The Relative Strength Index (RSI) sits near 49, just under its neutral midpoint.

At the same time, the Moving Average Convergence Divergence (MACD) histogram has crossed into positive territory, indicating a shift in momentum toward buyers.

Bitcoin’s short-term technical outlook remains favorable as long as price holds above its major moving averages.

The primary overhead resistance level lies at $85,000, a horizontal threshold where profit-taking might emerge if the rally continues.

A clear push above $85,000 would bolster the bullish case, though current technical data does not confirm a higher resistance target beyond that point.

To the downside, initial support rests at the 50-day EMA near $80,172.

This region holds extra significance given its proximity to the psychological $80,000 level.

A daily close beneath the 50-day EMA could dampen short-term momentum and bring the 100-day EMA at $77,904 back into play. Should selling intensify further, the next critical support sits at the 200-day EMA around $76,547.

A sustained break below the 200-day EMA would damage the current bullish technical setup and heighten the risk of a deeper retrenchment.

For now, the combination of reclaimed moving averages and strengthening momentum indicators favors a continued recovery, provided buyers defend the established support zone.