Bitcoin enters the week of the US midterm elections with troubling baggage: Wall Street is pulling capital out, traders are building short positions, and the world's largest crypto exchange is recovering from a record $6.3 billion hack.
The November 3 vote adds another layer of uncertainty to an already nervous market. On October 30, Bitcoin briefly dropped below $77,000, and on Monday it returned above $78,000. Ethereum also rebounded from $2,200 to around $2,287. However, this recovery has done little to eliminate the weakness hidden beneath the surface.
Wall Street sounds the alarm
On October 30, US spot Bitcoin ETFs lost $643.2 million — wiping out the inflows recorded over the previous four trading sessions. The week ended with a net outflow of approximately $202 million. Ethereum funds experienced an even more consistent sell-off — they lost $431.4 million over five consecutive trading days.
Fresh data reinforces concerns: institutional buying is insufficient to keep Bitcoin above $80,000. In October, institutional investors withdrew a net $515 million from US Bitcoin ETFs.
Meanwhile, the estimated average cost basis of Bitcoin based on on-chain data has risen to $74,800. A relatively narrow cushion remains between recent prices and the average purchase price.
Large traders are also preparing for volatility. A leveraged Bitcoin short position of $201 million was identified on Hyperliquid as of October 29 — a substantial bearish bet ahead of election week.
Elections could change the crypto industry's next step
The midterm election results will determine which party gains control of Congress. This could affect the fate of the CLARITY Act — a bill intended to establish uniform cryptocurrency regulation rules in the US. In September, the bill failed to advance in the Senate. A change in congressional control could alter its path, although disagreements around the document already extend beyond party lines.
Crypto investors are also watching the aftermath of the Binance hack. After the attack, clients withdrew a net $3.64 billion from the exchange, although the exchange stated that withdrawals are stabilizing and approximately 95% of the stolen assets have already been reimbursed from the company's own resources.
Two important levels
The first reference point is the $80,000 level. If Bitcoin rises above it, this could attract money back into ETFs.
The second reference point is $77,000. If the price falls below, the market will begin looking at $74,800 — the average price at which investors bought Bitcoin. A drop to this level means many holders will be at a loss.
Election results lie ahead, and confidence in the market remains low. The main question of the week is simple: can policy clarity bring buyers back when large investors are already pulling money out.
Cryptalist analysis: The market is demonstrating a classic picture of risk distribution ahead of a catalyst event: institutional outflows from ETFs and a large short position on Hyperliquid indicate caution from smart money. The $74,800 level remains a critical support line — a break below it could trigger a cascade of forced selling, while consolidation above $80,000 would signal the return of institutional demand.