Wall Street Erases Midterm Losses as Bitcoin Steals the Show

Wall Street ripped off the floorboards on Wednesday. After a Democratic sweep in the U.S. midterm elections sent futures tumbling, major indices clawed back their losses and closed sharply higher, according to ZyCrypto. The reversal pulled Bitcoin and the broader crypto market back into the spotlight as traders recalculated what divided government actually means.

The early damage was real. NASDAQ futures had slid more than 2% as results pointing to a Democratic sweep rolled in, and Asia took a hit too. Then sentiment flipped. The S&P 500 recovered 2.18%, the NASDAQ jumped 3.13%, the Dow Jones added 2.16% and the Russell 2000 climbed 2.31%. Japan's Nikkei 225 surged 5.09% and South Korea's KOSPI gained 4.71%, per analyst Bull Theory.

Bull Theory chalked the comeback up to investors rethinking the political math. Democrats are projected to take both chambers starting January 3, 2027, but Republicans hold the gavel until then. Trump keeps his full presidential toolkit in the meantime, including the veto, and overriding him would take a two-thirds majority in both chambers — a bar Democrats can't clear alone. The takeaway: Trump's legislative agenda gets harder to push, but Democrats can't ram through sweeping changes either.

Bitcoin rode the same wave. It briefly sank into the $75,000 range as a Democratic double win looked likely, then bounced as the picture cleared. TDX Strategies founder Dick Lo told CoinDesk the drop was a reaction to the sweep and the recovery came as a decisive result drained the political uncertainty. He noted that a Democratic Congress is generally seen as less friendly to pro-crypto legislation, while split government makes big market-hostile moves less likely.

Not everyone is ready to celebrate. Analytics firm 10x Research cautioned that Bitcoin and Ethereum still sit at a key technical turning point. In a post on X, the firm said its trend models remain technically short on both assets, adding that betting against established signals requires an exceptional risk-reward setup. Its framework leans on longer-term indicators, volume support levels and price thresholds to decide whether traders should stay defensive or turn bullish.

One risk hasn't gone anywhere. TDX Strategies flagged recent exchange security breaches as a lingering drag on sentiment, even as political uncertainty fades. With Bitcoin and Ethereum still bumping into technical resistance, the question now is whether Wall Street's rebound turns into real, sustained buying in crypto — or just a one-day sigh of relief.