🔼 Bitcoin recovers after US CPI data

Bitcoin is holding in the $76,000 - $78, 000 range today and reacted positively after today’s key U.S. August CPI inflation release, which came slightly above market expectations, showing monthly Base CPI reading at 0.3% YoY vs the 0.2% expected by investors. However, Bitcoin didn't panic after the reading and markets are quietly shifting their attention further ahead, first to the September Fed decision and then to the congressional midterm elections, which have historically coincided with Bitcoin bear-market bottoms. Even so, the outcome of the U.S. midterm elections scheduled for November 3 this year will probably have only a limited impact on Bitcoin’s price.

How could the midterm elections affect the crypto market?

Structural trends may support the continuation of Bitcoin’s long-term bull cycle from current levels, regardless of the election outcome. Only a Republican victory in both chambers of Congress could provide meaningful support for the cryptocurrency, while also increasing the likelihood of a “green light” for the expansion of the strategic BTC reserve suggested by Trump in August 2026 and for faster implementation of the Crypto Clarity Act. In such a scenario, other cryptocurrencies such as Ethereum, as well as large companies focused on blockchain infrastructure, could potentially benefit even more than Bitcoin itself, including USDC stablecoin issuer Circle and crypto exchange Coinbase. However, a Republican victory in both the Senate and the House of Representatives appears unlikely. A divided Congress would likely be neutral for the crypto market, while a Democratic victory in both chambers would be slightly negative, particularly for altcoins and crypto-related companies.

BTC price slowly recovers, supported by Wall Street

Improving buying activity among U.S. spot ETFs, which returned to accumulating Bitcoin at the turn of August and September, has not yet been reflected in a clear improvement in spot-market activity, capital inflows to crypto exchanges, or derivatives positioning. This suggests that retail investor interest remains limited, which historically has coincided with the early stages of sentiment recovery. Bitcoin trading near $80,000 still remains around 36% below its all-time high of $126,000. Drawdowns of this magnitude from bull-market peaks have historically corresponded with levels at which Bitcoin accumulation proved profitable over a 12-month horizon, especially when carried out during a market “rebuilding” phase.

The halving cycle and historical Bitcoin bottoms

The autumn 2026 peak occurred 534 days after the 2024 halving, fitting almost perfectly into Bitcoin’s multi-year halving cycle. Looking at the bottoms of the previous three Bitcoin sell-offs, each occurred on average around 850 days after the halving, which would correspond relatively well with the roughly $58,000 level recorded on June 26, 2026, 801 days after the halving. Historically, Bitcoin usually extended its cyclical sell-off after U.S. midterm elections, with the exception of 2022, when the bottom almost perfectly coincided with the election. If the decline were to repeat this time, the bottom would have to be reached in November, suggesting a range of around 930–950 days after the halving. This would be somewhat later than the historical average, but still close to the situation four years ago, when the bottom was reached 924 days after the 2020 halving. Our base-case scenario remains that Bitcoin has already seen its price bottom and that the bear market has been milder than in historical episodes, with a maximum drawdown of around 54% from the peak compared with historical averages of roughly 75–80%. This may reflect Bitcoin’s larger market capitalization, greater market maturity, easier access to Wall Street capital, and the “debasement trade,” which has encouraged investors to seek exposure to assets that are negatively correlated with the U.S. dollar.

Source: XTB Research

Technical analysis: Bitcoin price chart (D1 interval)

Bitcoin’s technical setup is particularly interesting. The exponential moving averages on the daily chart, the 200-day EMA shown by the red line and the 50-day EMA shown by the orange line, are forming a “golden cross,” with the 50-day average crossing above the 200-day average from below, suggesting a more durable return of the uptrend. On its own, this signal appears to support the thesis that the area around $58,000 marked the bottom of the current bear market, but it does not mean that BTC cannot return to deeper declines. One only needs to look back to 2023, when a similar formation appeared during the winter and Bitcoin subsequently fell by around 20%, from roughly $25,000 to around $20,000.

A pullback toward $66,000–68,000 therefore remains entirely possible in the current scenario, particularly if the Fed surprises the market with a hawkish signal and a September rate hike. Moreover, if Bitcoin were to reach its cyclical bottom only after the midterm elections, greater attention should be paid to the support zone around $48,000–50,000, where previous price reactions can be seen around the lower end of the 2024 consolidation range. The key short-term resistance remains the $82,000–83,000 zone. A breakout above it could open the way toward around $90,000. 

Source: xStation5