Bitcoin Recovers From Midterm Slump While DeFi Sectors Surge

Nov 4, 2026, 5:38 a.m. EST

3 min read

Crypto rebounds from midterm dip (CoinDesk data)

Summary

Venice token (VVV) led the CoinDesk 100 with an increase of about 7% since midnight UTC.
Market sentiment remained cautious despite the price bounce, with the CoinMarketCap fear and greed index resting at 37 and the altcoin season index registering 51.
Equity futures flipped into positive territory early on Wednesday after opening lower, as market focus pivots toward Friday’s upcoming U.S. employment data.

Bitcoin BTC$78,383.51 advanced approximately 1.3% to reach $78,300 since midnight UTC, bouncing back from a drop toward $75,600 around 03:00 UTC on Wednesday. The broader altcoin sector also demonstrated resilience, as ether ETH$2,324.65 climbed 2% and the CoinDesk 80 Index grew 2.3%.

CoinDesk’s DeFi Select Index (DFX) emerged as the top performer, expanding roughly 5% propelled by assets like injective INJ$7.6848 which delivered a 6.2% advance.

The initial slide in bitcoin transpired as U.S. midterm election tallies pointed to Democrats securing control of Congress, which stirred fresh uncertainties regarding regulatory policy for digital assets. Stock futures rebounded into the green early Wednesday following early-morning declines alongside bitcoin’s recovery.

Market participants are now turning their attention to Friday’s U.S. jobs report.

Derivatives positioning

Market-wide futures: Aggregate trading volume climbed 27% over a 24-hour window while open interest (OI) grew by just 3%, pointing to traders mostly cycling through existing positions with limited fresh capital entering the market. Total liquidations advanced 22% to reach $469 million. The taker volume ratio, measuring market orders, shifted to a slight buyer preference at 51.6% compared to 48.4%, reversing the previous day’s reading where sell orders exceeded 51%.
ZEC surge: ZEC open interest spiked 25% alongside a 14% price appreciation. Because open interest expanded faster than prices, new capital clearly entered the asset. Market-order buying was the strongest among all analyzed tokens, and funding rates remained positive, implying that long positions are compensating shorts in a sign of bullish sentiment.
NEAR rally lacks OI support: NEAR climbed roughly 7%, though open interest remained virtually unchanged with a 0.35% increase, indicating that the upward move lacked backing from newly opened positions. It registered the second-highest level of market-order buying, and positive funding rates meant longs continued paying shorts.
ETH over BTC: BTC open interest crept up 1.6% alongside a 2.1% increase in price. Meanwhile, ETH open interest expanded 4.2% matching a 2.7% price bump, confirming capital inflows. Both cryptocurrencies recorded volume spikes of roughly 37% to 40%, with positive funding rates forcing longs to pay shorts across both assets.
Funding rates: Most digital assets maintained mildly positive funding rates, meaning long positions paid short positions market-wide. Notable exceptions included XMR and BCH, which featured negative rates signaling a strong bearish presence.
Mixed CVD: OI-normalized cumulative volume delta (CVD), tracking aggressive market-order buying and selling, displayed mixed signals. Chainlink (LINK) registered the most negative readings. Most coins experienced aggressive selling during the initial morning dip, much of which has since been unwound.
Options calm: Bitcoin’s one-week implied volatility, reflecting expected price fluctuations among options traders, declined from roughly 41% down to about 34% following the early morning volatility spike. The pre-election surge in short-term options has dissipated. Skew, representing the extra cost of puts relative to calls, jumped to nearly 19% during the selloff before retreating to levels seen at the start of the session, signaling waning demand for downside insurance.

Calls versus puts: Four out of bitcoin’s six most heavily traded options contracts were call options, anchored by the December 25 $88,000 strike and the November 7 $78,000 strike. Ether showed the exact opposite pattern, with four out of six key contracts being puts.

Token talk

Venice token VVV$23.99, native to the Venice artificial intelligence ecosystem, paced the gains on the CoinDesk 100 by climbing roughly 7% since midnight UTC, pushing its 24-hour gains to about 17%. Grass GRASS$0.6029, bonk BONK$0.0₅2985, near NEAR$4.0918, and morpho MORPHO$2.2282 each advanced about 6%, whereas zcash (ZEC) added 5% to bring its 24-hour gains to 12%.
Decentralized finance tokens spearheaded the broader market strength, with all seven members of the DeFi Select basket trading higher, led by injective INJ$7.6848 and ethena (ENA).
Pepe PEPE$0.0₅5023 and bonk grew by approximately 5% and 6% respectively, outperforming the 1.1% gain posted by the CoinDesk Memecoin Index.
Assets tied to Donald Trump underperformed. The official TRUMP token retreated 7.1% while world liberty financial WLFI$0.04976 dropped 5%, tracking the Democratic electoral victories. Shares of Trump Media fell 6.5% during premarket equities trading.
The CoinMarketCap fear and greed index sat at 37, placing it firmly in fear territory, while the altcoin season index registered at 51.