On the evening of November 6, Beijing time, key progress was made in the counting results of the U.S. presidential election, causing traditional financial markets and crypto assets to amplify volatility simultaneously. Bitcoin surged quickly during the session, breaking through previous highs, but then showed a significant pullback as the market heated up around the "new government combination," "regulatory path," and "liquidity expectations."

Overview of Election Night Market

● Market Performance:
- From midnight to evening on November 6 in the East Eight Zone, Bitcoin's maximum fluctuation within 24 hours exceeded 12%, briefly hitting around $70,000, before retreating to a narrow range of $65,000–$66,000.
- Ethereum also saw a simultaneous upward surge, with an intraday increase exceeding 8%, but it also experienced a pullback towards the end of the session, with the daily entity increase significantly narrowing.
- In the U.S. stock market, influenced by election uncertainties, the Nasdaq and S&P 500 initially fell and then rose, with the volatility index VIX spiking by several dozen percentage points in a short time, reflecting a rapid switch in risk appetite.

● Funds and Derivatives:
- The 24-hour trading volume of Bitcoin perpetual contracts on major exchanges doubled, with both long and short positions showing a significant increase in leverage usage, and the liquidation amount significantly expanded compared to the previous day.
- Implied volatility for options spiked during the voting phase, with short-term options IV far exceeding long-term IV, indicating that the market is pricing in short-term risks around the "election event window" more aggressively.

● Macroeconomics and Hedging:
- The dollar index strengthened briefly before the election results became clear, then retreated as the market bet on a potentially loose fiscal and monetary stance from the new government.
- Gold rose moderately during the same period, but its increase was significantly smaller than that of Bitcoin, reflecting the intertwining roles of "digital asset hedging" and "high beta risk assets."

News Driven: How Election Results Change Market Expectations

● Multiple Variables of New Government Policy Expectations:
- The market dissects the election results into three layers: White House ownership, control of the House and Senate, and key regulatory appointments. The combination of these three determines the overall attitude and enforcement strength towards the crypto industry in the future.
- Research briefs indicate that investors are particularly focused on: the pace of fiscal deficit expansion, the independence of the Federal Reserve and sources of pressure, and the overall framework for technological innovation and financial regulation, all of which will indirectly affect the valuation and risk premium of crypto assets.

● Uncertainty in Regulatory Path:
- Several legislative and regulatory disputes surrounding crypto assets are still ongoing, and the election results will influence the appointments of senior regulatory officials, thereby changing enforcement intensity and regulatory boundaries.
- The brief emphasizes that the market has expectations for "regulatory unity and clear rules," but there are disagreements about whether there will be more frequent and intense enforcement actions in the short term, creating a foundation for amplified volatility.

● Rapid Switching of Market Narratives:
- In the early voting phase, the mainstream narrative focused on "the new government may bring a more friendly innovation environment and loose fiscal policies," driving Bitcoin's rapid ascent.
- As results became clearer and the complexity of legislative and regulatory games was reassessed, the narrative quickly shifted to "realizing expectations + rising regulatory uncertainty," leading to profit-taking by bulls and short-term funds reversing positions, triggering a pullback.

Fund Movements: Three Signals from Spot, Futures, and On-Chain Funds

● Exchange Data:
- Brief data shows that during the election result phase, net inflows of Bitcoin spot on leading exchanges significantly increased, indicating that some long-term holders chose to cash out at highs, increasing short-term supply.
- Meanwhile, long positions in perpetual contracts expanded simultaneously as prices surged, with funding rates briefly favoring longs, indicating that short-term leveraged funds were more inclined to bet on upward movements.

● Institutions and Over-the-Counter:
- The price spread on over-the-counter bulk trading platforms widened on election night, with transaction prices showing a certain premium relative to spot markets, indicating that institutions and large funds are more willing to pay a premium for transaction certainty.
- The brief mentions that some traditional institutions are hedging crypto exposure through futures and options to reduce "black swan" risks on election night, leading to an overlap of hedging and speculative demand in the derivatives market, amplifying volatility.

● On-Chain Funds and Position Structure:
- Long-term holders (holding positions for over a year) have not shown signs of large-scale selling; rather, it is medium- to short-term holders who are trading during high volatility windows.
- On-chain data suggests that some large addresses slightly reduced their positions as prices approached previous highs, but the scale was limited, resembling structural rebalancing rather than systemic flight.

In-Depth Logic: The Election is Not a Single Positive or Negative Factor, but a Part of Cyclical Resonance

The intense volatility driven by this election is not an isolated event but a result of resonance with macro cycles, liquidity environments, and internal industry evolution. On one hand, the world is still in a phase of high interest rate pressure and persistent inflation, and the fiscal stance of the new government will directly affect debt expansion and monetary environments in the coming years, thereby changing the risk-free rate and pricing benchmarks for risk assets. On the other hand, crypto assets themselves are in a period of accelerated institutionalization and compliance, with the improvement of spot ETFs, custody, and compliant trading infrastructure making Bitcoin more sensitive to macro "trading themes," evolving the election from "peripheral noise" to a direct driving factor. Additionally, after experiencing multiple rounds of regulatory events, platform risks, and deleveraging, the position structure has become more institutionalized, and derivatives have become more developed, causing the market to amplify price volatility when facing macro catalysts like the election, while systemic risks remain relatively controllable. The pullback is essentially a process of rapidly realizing short-term expectations and repricing, rather than a simple reflection of one-sided bullish or bearish sentiment.

Bull-Bear Game: Core Divergence Between Optimism and Concerns

● Optimistic/Supportive Side:
- They believe the election results have ended long-term uncertainties, and policy paths and regulatory directions will gradually become clearer, which is beneficial for institutions and long-term funds to accelerate their entry.
- They bet that the new government will find it more difficult to implement severe tightening fiscally, and combined with future economic slowdown pressures, this may force policies to tilt towards moderate easing, benefiting the valuation of risk assets, including Bitcoin.
- From the position structure perspective, long-term holders have not significantly reduced their positions, seen as a "vote" for the medium- to long-term outlook, while short-term volatility is viewed as "technical noise in an upward trend."

● Pessimistic/Concerned Side:
- They worry that the new government may demonstrate its determination to govern by sending stronger signals of financial regulation in the early stages of its term, including a more stringent examination of crypto assets, increasing compliance costs and uncertainties.
- They believe that the market will return to a "calm pricing model based on interest rates and fundamentals" after the election, and if economic data weakens while inflation remains sticky, an unfavorable combination of "stagflation + high interest rates" may emerge, suppressing the valuations of high-volatility assets like Bitcoin.
- They are concerned that the large leveraged longs accumulated before and after the election, in the absence of sustained incremental funding, may trigger further deleveraging and a phase-top structure with long upper shadows.

Outlook: Short-Term Trading Windows and Mid-Term Policy Implementation Will Be the Focus

In the short term, the market will focus on the confirmation of the new government's cabinet and key regulatory appointments, as well as their public statements on crypto assets, financial innovation, and technology companies. Any details regarding regulatory frameworks, tax policies, and financial market reforms could become new catalysts or pressure sources for prices. For traders, the weeks following election night will still be a high-volatility window, and the pricing and liquidity conditions of derivatives are worth continuous attention; for medium- to long-term capital allocation, it is more critical to observe the new government's actual actions regarding fiscal discipline, debt management, and attitudes towards financial risks, rather than the election results themselves. As uncertainties are gradually replaced by "policy details," the market's pricing focus on Bitcoin will return to the macro liquidity cycle and the industry's own adoption curve.

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