From November 3 to 4, 2026, the U.S. midterm elections unfolded nationwide: Voting across states progressed during the day, and by 7 PM Eastern Time on the 3rd, polling stations in states such as Georgia, Kentucky, South Carolina, Vermont, Virginia, and Indiana closed one after another and began counting the votes. Some congressional districts in Florida also entered the vote-counting phase. The Associated Press was the first to announce the results for the Virginia Senate seat, where Democratic Senator Mark Warner defeated Republican challenger Bert Mizusawa to win re-election, marking one of the first published Senate results; however, overall control of both houses of Congress remained undecided. Meanwhile, before polls closed, Trump sent a strong signal indicating he would veto legislation led by the Democrats if necessary, with White House reporters relaying that he privately viewed the “Democrats winning both houses” as the “worst-case scenario.” In initial CNN polls, three-quarters of voters expressed dissatisfaction with the country's direction. These fragments combined to create a high-pressure political uncertainty seen by the market. In this context, however, Alternative.me's Fear and Greed Index rose from 26 to 34 in a short time, moving from the edge of “extreme fear” back into the still “fearful” yet cooler range—emotions slightly repaired, yet leading ahead of the clarification of the political situation. This dislocation of “political path still uncertain, risk sentiment begins to rebound” forces us to re-ask: In this high-uncertainty phase where the control of both houses remains undecided, why does the crypto market provide emotional warming price signals faster than the traditional political agenda? Is this early reaction recalibrating the risk premium for BTC and ETH, or is it setting up new mispricing for the next round of volatility?
Polling Stations Close, Political Uncertainty Cloaks the Market
At 7 PM Eastern Time on November 3, the bells signifying the closure of the first polling stations rang: Georgia, Kentucky, South Carolina, Vermont, Virginia, and Indiana simultaneously entered the counting phase, and certain congressional districts in Florida also began opening votes. "Vote count updates" flashed across the screen as the Associated Press first announced that Virginia Democratic Senator Mark Warner defeated Republican challenger Bert Mizusawa to win re-election, one of the first Senate results published, yet control of both houses of Congress still lacks definition. Concurrent with the digital competition was a contest at the level of discourse: Trump, in an interview with CBS before the polling stations closed, signaled that he would veto legislation proposed or led by Democrats if necessary, while White House reporter Kristen Holmes cited sources stating he privately regarded the Democrats winning both houses as the “worst-case scenario.” On one side, CNN’s initial polls showed about one-fifth of former Trump supporters no longer recognized his performance, and about three-quarters of voters were dissatisfied with the country’s development direction. On the other side, the electoral map remained unfinished, completely laying out the combined space for regulatory paths, fiscal orientation, and industrial policies, yet no route could be considered a “baseline scenario.”
For macro pricing, this uncertainty itself would be written into an additional risk premium: The market is faced not with a specific policy but with a basket of possibly vastly different future paths. Depending on which party dominates future legislation and the intensity of the executive-legislative tug-of-war, the impact on the crypto industry's regulatory framework, tax attitudes, and compliance thresholds will present starkly different distributions, with the only certainty being that “the result remains undecided.” In the traditional risk asset world, such political noise often leads to reduced positions and lower valuations to “wait for the result,” using a higher discount rate to hedge the tail risks of policy; yet this time, at the moment of political uncertainty peaking with the closure of polling stations, Alternative.me’s Fear and Greed Index rose from 26 to 34, still in the “fear” range but no longer continuing to drop, indicating that crypto traders chose to stop further selling at the height of uncertainty. For high-beta assets such as BTC and ETH, this means the market is using a leading emotional recovery method to provide an “advance discount” on a basket of policy paths yet to be unveiled, and this pricing feels more like a collective bet: a bet on future regulation not taking a sharp downturn, or setting up new sources of volatility if the path falls into the “worst-case scenario.”
Fear Index Rises from 26 to 34: Emotions Lift from Extreme Cold
The Fear and Greed Index of Alternative.me increased from the previous day’s 26 to 34, appearing to be just an 8-point fluctuation but signifying a slight yet critical turning point in emotional structure—transitioning from “extremely pessimistic” to “mildly fearful,” still far from “neutral” or even “greedy.” This step does not mark a complete emotional recovery, but rather resembles a collective shift from “panic selling” to “cautious waiting.” Especially as the midterm election results remain uncertain and the control of both houses is still filled with ambiguity, macro and political risks have not materially dissipated, yet the index has begun to repair ahead of the fundamentals, indicating a slight decoupling between price and emotion: the news has not gotten better, but participants’ pricing of risk is no longer getting worse.
From a trading structure perspective, this rise from 26 to 34 feels more like an emotion rebound driven by position management rather than a repricing embracing the fundamentals. Following successive sell-offs, the marginal supply of panic sales has dwindled at this moment, with some short-term funds beginning tentative “bottom fishing,” gradually building positions within the still “fearful” range, while previously high-leverage and weak hands seized the opportunity for emotional release. Historical experience tells us that when indices remain locked in the panic range but show continuous rebounds, it often signifies that selling pressure has phased out, shifting the market from “who sells first” to “who dares to buy first.” For high-beta assets like BTC and ETH, this emotional “early recovery” does not guarantee an immediate price reversal but suggests to us: the true direction may only be revealed after the political path settles, and every current revival of the index serves as a starting point for repositioning chips and emotions for future volatility.
Trump's Veto Threat, Legislative Prospects and Coin Prices
On the very evening when panic emotions slightly repaired, Trump signaled to CBS before polling station closures that he would veto any legislation proposed or led by the Democrats if necessary, essentially revealing the predetermined cards in the post-election game. His privately stated perspective disclosed by White House reporter Kristen Holmes, that the Democrats winning both houses is the “worst scenario,” further sketches a path: Regardless of election outcomes, Washington is likely to operate under a high-intensity legislative confrontation. CNN's initial polls show about one-fifth of voters who previously supported Trump no longer recognize his performance, and about three-quarters of voters are dissatisfied with the direction of the country's development, creating a broad and sharp social rift, raising the political costs of compromise for either side in legislation. For the market, this is not a simple “red versus blue” contest, but a scenario where long-term decisions on taxation and regulatory frameworks are left unresolved and could be vetoed or rewritten at any moment.
Within this framework, assets like BTC and ETH are forced to substitute the missing policy certainty with a higher political risk premium: On one side, the opacity of regulatory and tax paths has elevated the discount rate in valuation models, pushing the timeline for “post-election clearing of uncertainties” further back; on the other side, the veto threat and expansion of the “worst-case” narrative amplifies tail risks for all assets, making it difficult for the crypto market to return to a low volatility and low-risk compensation state, even under the rising surface emotions of the Fear and Greed Index. For traders holding BTC and ETH, current prices are more reflective of probability-weighted paths rather than betting on a single outcome: If a prolonged standoff occurs post-election, the market may lean towards regarding such decentralized assets as tools to hedge against political dysfunction; if one side gains a relatively strong advantage in Congress, and veto threats are frequently fulfilled, then expectations on regulation and taxation will undergo frequent repricing, forcing risk premiums to fluctuate at elevated levels. In other words, Trump’s veto threat has already been accounted for in BTC and ETH through a higher political risk premium, while the true change in this premium curve will depend on how vote count results reshape the balance of legislative power in Washington.
Capital Flow and Trading Dynamics During Emotional Recovery Period
The rise of the Fear and Greed Index from 26 to 34 represents a typical range of “pulling back from extreme pressure, yet not reaching安心.” With midterm election results still unrevealed, no conclusions can be drawn on how Washington’s legislative power will be reordered. However, emotional indicators have already warmed ahead of the fundamentals, implying that some funds are beginning to retreat from extreme defensive positions to rebalance between risk assets and U.S. dollar cash: No longer engaging in unilateral selling of all risk assets, yet not willing to indiscriminately chase high-risk chips either. Research briefs did not provide on-chain capital flow or specific price data for BTC or ETH; the only signal we can seize is the emotional recovery signal itself—it indicates the simultaneous presence of “slow sell-off” and “tentative replenishment,” rather than a specific, unified offensive direction.
In this phase where panic has yet to clear, BTC and ETH are more like being locked in a politically driven volatility range: On the lower bound, short-term bottom-fishers are fighting for rebounds, and on the upper bound, heavier positions are reducing holdings at highs, with derivatives leverage more inclined to contract rather than increase to avoid passive liquidation in the face of unexpected post-election results. Traditional experience tells us that during significant political risk windows, funds tend to pull between risk assets and safe-haven assets rather than bet on a singular direction, and this mentality directly reflects in the choice of assets—mainstream coins with deep liquidity and sufficient depth become the few that can still engage in capital competition, while high-beta small-cap tokens are deliberately avoided, leaving them only for the next round after emotions truly shift from “fear” to “greed.”
Election Results Unclear, How to Price Subsequent Risks
In this structural preference for positions and variety, what is genuinely difficult to price is not current volatility, but the macro path itself post-election. As of November 4, control of both houses remains undecided, with Trump publicly signaling “he would veto legislation proposed by the Democrats if necessary,” while simultaneously indicating he views the Democrats capturing both houses as the “worst-case scenario,” meaning whichever side gains an advantage, the market must reserve risk premiums for the longer-term legislative tug-of-war and regulatory competition. For BTC and ETH, the upcoming pricing anchor will depend more on: firstly, the differences in fiscal and regulatory expectations brought about by the final allocation of the two houses, whether it leads to a stronger compliance framework or maintains the status quo of “dragging its feet”; secondly, regarding this outcome, whether risk premiums rise passively (escalation of confrontation, policy paralysis) or gradually retreat under the baseline of “not triggering the worst-case scenario.” Currently, Alternative.me's Fear and Greed Index has returned from 26 to 34, still within the “fear” range, yet signifies that the market's sensitivity to political noise is declining, with some investors beginning to downplay extreme scenarios and reprice mainstream assets. The next steps need to closely watch three sets of signals: first, whether the Fear and Greed Index continues to rise, leading to a recovery in transactions for high-beta sectors; second, once the U.S. election results are finalized, the power dynamics between the two houses and the White House; third, the initial policy statements and regulatory tones surrounding this combination—only when all three improve simultaneously can the current emotional recovery be upgraded from a “short-term event-driven rebound” to a “mid-term risk preference turning point.”
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