Bitcoin rebounded to around $78,300 after briefly falling to $75,600 during Wednesday’s trading session, recovering roughly 1.3% since midnight UTC as markets responded to the Democratic Party’s midterm election gains. Ether advanced about 2%, while the CoinDesk 80 Index climbed 2.3%.
The recovery extended beyond the largest cryptocurrencies, with decentralized finance tokens leading the market higher. The CoinDesk DeFi Select Index gained 5%, supported by a 6.2% rise in Injective (INJ).
Bitcoin initially came under pressure as election results pointed to Democrats securing control of Congress, raising questions about the future of crypto-related legislation. However, sentiment improved as U.S. stock futures turned positive. Investors are also looking ahead to Friday’s U.S. employment report for further clues about the economic outlook.
Crypto Derivatives Point to Stronger Buying Activity
Trading activity across crypto derivatives markets increased over the past 24 hours. Futures volume rose 27%, while open interest (OI) climbed 3%, suggesting that much of the activity reflected existing positions changing hands rather than a major influx of new capital.
Liquidations increased 22% to $469 million. Meanwhile, the taker buy-sell ratio moved into positive territory, with buyers accounting for 51.6% of market orders against 48.4% for sellers. A day earlier, selling activity had exceeded buying by more than 51%.
Zcash (ZEC) recorded a notable increase in speculative positioning. Its open interest rose 25% as its price advanced 14%, indicating that traders were opening fresh positions alongside the rally. ZEC also registered the strongest market-order buying pressure, while positive funding rates showed that long traders were paying short sellers.
NEAR gained 7%, although its open interest increased by only 0.35%. This suggests the price move received limited support from new derivatives positions. Nevertheless, NEAR recorded the second-highest market-order buying activity and maintained positive funding rates.
Bitcoin’s open interest increased 1.6%, compared with a 2.1% price gain. Ether saw a 4.2% rise in open interest as its price advanced 2.7%. Trading volumes for both assets increased between 37% and 40%, while funding rates remained positive.
Funding rates were slightly positive across most major cryptocurrencies. Monero (XMR) and Bitcoin Cash (BCH) were among the exceptions, recording negative readings.
Open-interest-adjusted cumulative volume delta data presented a mixed picture. Chainlink (LINK) recorded the strongest negative reading, while market-order selling that emerged during Bitcoin’s early decline was partly reversed as prices recovered.
Options markets also showed reduced demand for downside protection. Bitcoin’s one-week implied volatility dropped 41% to 34%, while a temporary increase in put-call skew, which had approached 19%, subsequently faded toward its previous level.
Four of Bitcoin’s six most actively traded options contracts were calls. The December 25 $88,000 call and November 7 $78,000 call attracted particular attention. Ether options activity showed a different pattern, with puts accounting for four of its six most active contracts.
DeFi Tokens Lead Gains as Trump-Linked Assets Fall
Venice (VVV) was among the strongest performers, rising 7% since midnight UTC and gaining 17% over the previous 24 hours to lead the CoinDesk 100 Index.
GRASS, BONK, NEAR and MORPHO each advanced approximately 6%, while Zcash added 5% during the session and was up 12% over 24 hours.
All seven constituents of the CoinDesk DeFi Select Index traded higher, with Injective and Ethena (ENA) among the leading performers.
Memecoins also outpaced the wider market. PEPE climbed 5% and BONK gained 6%, while the CoinDesk Memecoin Index rose just 1.1%.
Tokens associated with U.S. President Donald Trump moved in the opposite direction. The TRUMP token dropped 7.1%, while World Liberty Financial’s WLFI declined 5%. Shares of Trump Media also fell 6.5% in premarket trading.
Despite the broader recovery, sentiment indicators continued to reflect caution. CoinMarketCap’s Fear and Greed Index stood at 37, remaining in the fear zone, while its Altcoin Season Index registered 51.
