Bitcoin surges past $80,000 as liquidations and inflows spur recovery

Key takeaways

• On Thursday, bitcoin (BTC) moved above $80,200, continuing its rebound after regaining its 50-, 100-, and 200-day exponential moving averages (EMAs).
• Wednesday saw $74.57 million in net inflows into US spot bitcoin ETFs, halting a three-day streak of outflows.
• Bitcoin now encounters its next key resistance at $85,000, with immediate support from the 50-day EMA around $80,172.

Bitcoin's rebound continued on Thursday, pushing above $80,200 as a surge of short-seller liquidations and fresh inflows into US spot bitcoin ETFs boosted investor confidence.

After closing above its key exponential moving averages in the prior session, the top digital asset was trading near $80,200.

The recovery came after a period of elevated volatility in crypto derivatives markets, with roughly $694.40 million in leveraged positions wiped out across a 24-hour period, according to CoinGlass.

Bears bore the brunt, as short positions made up the majority of the liquidations, indicating that traders who had bet on further drops were compelled to close out their positions when bitcoin recaptured the $80,000 threshold.

On the institutional front, spot bitcoin ETFs drew $74.57 million in net inflows on Wednesday, snapping three straight days of withdrawals, signaling early stabilization in demand.

In addition, the US midterm election results helped lift sentiment for risk assets, aided by falling oil prices and lower bond yields.

Bitcoin bounces back as US midterm outcomes boost risk appetite

Bitcoin's upward move accelerated after the US midterm elections, in which Democrats won control of the House and Senate.

The outcome created a divided government, likely curtailing President Donald Trump's capacity to push through some of his legislative and fiscal agenda without backing from Congress.

Market participants also weighed the foreign policy implications, especially regarding the continuing conflict with Iran.

Senate Democratic leader Chuck Schumer stated on Wednesday that his party intends to bring an end to the Iran war and might leverage its power over government spending to achieve that goal.

These political moves fueled expectations that the chance of additional military escalation might decrease.

Still, the election outcome does not assure a shift in military strategy, and uncertainty around the conflict persists.

Bitcoin's rise above $80,200 occurred alongside these events, but the rebound also drew strength from heavy activity in the derivatives market.

A rapid unwinding of leveraged bets added to bitcoin's latest price climb. Approximately $694.40 million in crypto derivatives positions were liquidated over the previous 24 hours, according to CoinGlass.

Short positions made up about 70% of the sum, or around $556 million. This skew shows that bearish traders incurred the heaviest losses as crypto prices rebounded.

Bitcoin regains key moving averages

Bitcoin's daily chart has brightened after the cryptocurrency climbed above its 50-, 100-, and 200-day exponential moving averages.

On Thursday, BTC was trading near $80,200, staying above the 50-day EMA of $80,172. The 100-day EMA sits at $77,904 and the 200-day EMA is around $76,547.

Exponential moving averages give more weight to recent price action, helping traders gauge the market's trend.

Moving above these lines indicates that bitcoin has recovered crucial technical support after the recent decline.

Bitcoin's near-term task, however, is to hold above the 50-day EMA. A durable stay above $80,172 would bolster the recovery picture and imply that buyers are protecting the regained level.

Losing that area could spark fresh selling and raise the chances of a retreat to lower supports.

Daily momentum gauges also signal better conditions. The relative strength index (RSI) is near 49, just under its neutral level.

Meanwhile, the MACD histogram has gone positive, which suggests momentum is swinging toward buyers.

Bitcoin's short-term technical view stays positive as long as it holds support above its key moving averages.

The next notable resistance on the upside is $85,000. If the rally persists, that horizontal zone may draw profit-taking.

A lasting break above $85,000 would reinforce the bullish case, though the technical data provided does not set a confirmed next resistance.

To the downside, initial key support is the 50-day EMA around $80,172.

This level is especially important as it is near the psychological $80,000 mark.

A daily close under the 50-day EMA could sap near-term momentum and leave the 100-day EMA at $77,904 exposed. Should selling accelerate, the next major floor would be the 200-day EMA at roughly $76,547.

A sustained drop under the 200-day EMA would weaken the existing bullish technical setup and heighten the risk of a more pronounced decline.

For the moment, the mix of retaken moving averages and improving momentum readings supports additional gains, as long as buyers keep defending the support area.