The rebound after the U.S. midterms only lasted for one day. The heavy selling of U.S. tech stocks has spread to the crypto market, erasing the gains recorded by Bitcoin, Ethereum, and XRP after the U.S. presidential election. More than $1 billion in leveraged crypto bets were liquidated during this decline.
The trigger factor is the increasing concern in the market about what the Democratic Party's control of Congress will mean for artificial intelligence. Artificial intelligence has been a theme that has driven the market over the past three years.
How sharp has the decline been in the crypto market?
According to market data, major cryptocurrencies have seen a significant decline:
- Bitcoin: $76,073, down 4.9% in 24 hours, down 6.5% in 7 days
- Ethereum: $2,256, down 6.6% in 24 hours
- XRP: $1.24, down 5.4% within 24 hours
- Solana: $89.96, down 6.6% within 24 hours, and down 12% in the past week.
- Hyperliquid: $78.58, down 7.8% within 24 hours, down 15.7% in the past week
- Dogecoin: $0.0718, down 6.7% within 24 hours
Binance data shows that Bitcoin once fell to $75,568, and Ethereum once fell to $2,236.78.
$1 billion liquidation
Traders who bet on a continued rise in prices were hit the hardest. According to data from CoinGlass:
- In just 4 hours, approximately $880 million in positions were liquidated, of which $819 million were long bets.
- The total settlement amount in the past 24 hours exceeded 1.03 billion US dollars.
- 198,192 traders are affected.
- The largest single settlement amount was $10.94 million, which occurred on the ETH / USDT trading pair of Binance.
The AI trading logic on Wall Street has failed.
The selling pressure began in the stock market. A day after the election results were announced, the Dow Jones index soared by more than 1,500 points, recording its best single-day performance since April 2025, but market sentiment then took a sharp turn for the worse. During trading, the Nasdaq index fell by about 5.1%, the S&P 500 index fell by about 3.4%, and the Dow Jones index fell by about 2.4%.
According to market data shared on X, tech stocks suffered the most severe losses:
- AMD: Down by approximately 12.5%
- Micron Technology: Down about 10%
- Tesla: Down about 9%
- NVIDIA: Down about 7%, with a market value evaporating by approximately $300 billion
- Broadcom: Down about 5.5%
Why Investors Are Worried
Investors are concerned that the new Congress may introduce stricter regulations for the artificial intelligence industry. Reports suggest that Democrats also plan to investigate the business dealings of the Trump family, including their cryptocurrency operations.
Is this a "bull market trap"?
Some traders on X indicated that the sharp rise on Wednesday might have been a trap, attracting buyers in first before prices turned around and fell. Regardless of the reason, the reversal came quickly: within the first few hours of trading on Thursday, the S&P 500 index had already lost all of its gains since the election.
This round of crypto selling also occurred after reports that the US military is preparing to deal with the possibility of Iran returning to large-scale conflict, which further exacerbated market risk aversion.
What will happen next?
Currently, the crypto market is highly correlated with the trend of tech stocks, making the NASDAQ the most important indicator to watch. For Bitcoin, the range between $75,000 and $76,000 serves as a key support level. If it breaks below this range, it could lead to a deeper decline; however, if it manages to hold this level, it may provide a basis for buyers to recover.
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