Bitcoin Holds Near $77,500 as Midterm Vote Puts Crypto Legislation in Focus

Bitcoin faces a political and market test

Bitcoin traded near $77,500 on Tuesday morning as U.S. midterm polls opened, slipping about 0.6% during the day. The price was also roughly $30,000 below its level one year earlier, according to the figures in the report. The election brings a political question into a market already under pressure: which party controls Congress may affect whether lawmakers revive or advance a stalled framework for regulating digital-asset markets.

That legislation, the CLARITY Act, passed the House by 294 votes to 134 in July 2025, but did not clear a Senate cloture vote on Sept. 15, which ended 49-50. The bill therefore remains unresolved rather than enacted. If Congress takes no action before its new session convenes on Jan. 3, the measure expires and would have to be introduced again, making the timing and composition of the next Congress consequential for its prospects.

Prediction markets put the Democrats’ chances of taking the House at 94% and the Senate at 74%. Those are market-implied probabilities, not confirmed election results. A Democratic Senate would likely place Senator Elizabeth Warren in line to chair the Banking Committee, while analysts at TD Cowen describe a Democratic sweep as the likeliest and least favorable outcome for the crypto industry. They see a divided Congress as leaving more room for a narrower agreement.

A week of selling leaves support levels in focus

Crypto groups have spent more than $200 million on the midterms, underscoring the industry’s effort to influence an election with potential regulatory consequences. That spending does not settle the bill’s fate: passage in the House did not produce Senate approval, and the current cloture vote fell short. For markets, the immediate distinction is between a possible path to another legislative compromise and the risk that the existing bill lapses when the new session starts.

Bitcoin’s retreat began before election day. It opened November near $78,500 and had shed about $2,000 by Tuesday, following an October that ended roughly 7% lower. That was the second consecutive October decline. On Oct. 28, after the Federal Reserve held rates and Alphabet and Samsung reported weak earnings, bitcoin dropped below $80,000 for the first time in weeks, while about $356 million in leveraged positions were liquidated.

The next day brought a much larger shock to crypto markets: attackers that the FBI attributes to North Korea drained about $6.3 billion from Binance hot wallets, described in the report as the largest crypto theft on record. Bitcoin initially held firm, but fell about 4% on Friday. More than $1.3 billion of leveraged positions were liquidated, while U.S. spot Bitcoin ETFs saw $643.3 million in outflows, their biggest single-day withdrawal since June 25.

Inflation and energy complicate the rate outlook

ETF withdrawals continued on Monday, when another $399 million left the funds. Bitcoin had recovered to $78,491 late Sunday before turning lower again on Monday and Tuesday. The sequence shows that a brief rebound did not yet reverse the selling pressure described in the report. ETF flows and liquidations offer evidence of how investors and leveraged traders responded, but neither alone establishes whether the pullback will continue or stabilize.

Traders are watching a support band between $76,264 and $76,476, near the 200-day exponential moving average. If that area gives way, the September low of $74,967 is the next level cited in the report. Above the market, the 50-day EMA near $80,800 is identified as the first resistance. The Crypto Fear & Greed Index stood at 37 on Monday, a reading classified as fear, adding to the picture of cautious sentiment.

The interest-rate backdrop remains difficult to read as a source of relief. The Fed held its policy range at 3.75% to 4.00% on Oct. 28 in a 10-2 vote, with two officials dissenting in favor of an increase. The decision followed a rate rise in September, the first since July 2023. Polymarket placed the odds of a December hike near 71%, reflecting expectations rather than a settled policy decision.

Economic releases and legislation shape the watchlist

Inflation and growth figures show why the policy debate remains active: September personal consumption expenditures inflation was 3.6% year over year, while third-quarter GDP expanded at a 3.4% annualized pace. The 10-year Treasury yield reached 5.36% in early October, its highest since 2002, then eased to about 4.91% on Monday. These indicators provide context for financial conditions, but the next Fed move is still uncertain.

Oil prices have added volatility to that outlook. Brent crude fell 7.7% on Monday to $104.66 a barrel after Iran and the United States signaled openness to talks, its largest one-day decline since July. It rebounded partly on Tuesday to around $106.60 after reports of a U.S. strike on Iran’s Qeshm Island. Disruption around the Strait of Hormuz has kept crude above $100, while the report links elevated energy costs with pressure on headline inflation.

The near-term calendar includes the October jobs report on Friday, with consensus near 65,000 after September’s 29,000, October CPI on Nov. 10 and the Fed’s next decision on Dec. 9. Binance is also due to provide its next proof-of-reserves snapshot Wednesday. Options markets appeared calm, with Deribit’s DVOL near 36.5, but past midterm Novembers were weak: bitcoin fell 36.6% in November 2018 and 16.2% in November 2022, both during bear markets. Those precedents do not determine this month’s outcome.

Source: BitcoinMagazine