Bitcoin has fallen more than 6% towards $75,000 on November 6 as a major sell-off in US technology stocks and heavy leveraged liquidations have put renewed pressure on the cryptocurrency mark
Bitcoin has fallen more than 6% towards $75,000 on November 6 as a major sell-off in US technology stocks and heavy leveraged liquidations have put renewed pressure on the cryptocurrency market.
SummaryAccording to crypto.news data, Bitcoin (BTC) traded at $75,388 at the time of writing, down 6.3% over the past 24 hours. The cryptocurrency had been trading above $80,000 earlier in the previous session before sellers pushed it below $78,000 and eventually towards its recent seven-week low.
The decline wiped out Bitcoin’s brief post-election recovery as heavy losses across Wall Street spilled into cryptocurrency markets. Investors were particularly concerned about the outlook for artificial intelligence companies following the Democratic Party’s victory in both chambers of Congress.
US equities suffered heavy losses on Thursday, November 5, with the Nasdaq Composite falling 5.5%, according toReuters market coverage. The S&P 500 dropped 4.3%, while the Dow Jones Industrial Average lost 3.4%.
Semiconductor companies were among the worst affected, with the Philadelphia Semiconductor Index plunging 12% and Nvidia shares losing more than 9%.
Investors feared that increased political opposition could slow the construction of AI data centers, while doubts about returns on the billions of dollars committed to AI infrastructure had already weighed on technology stocks.
The selling reached cryptocurrency-related equities, with Coinbase and Strategy shares falling around 10%, while several Bitcoin mining companies recorded even larger losses.
Joshua Lim, global co-head of markets at institutional crypto brokerage FalconX, told CoinDesk that fresh selling was returning as investors considered the implications of slower data center development.
You might also like: Bitcoin’s $74.6m ETF rebound meets a tougher US regulatory outlook
Carlos Guzman, vice president of research at digital asset trading firm GSR, offered a similar assessment.
“The midterms appear to have triggered this sell-off,” Guzman said, citing concerns about opposition to data center expansion.
Meanwhile, Vetle Lunde, head of research at K33, told Bloomberg that Bitcoin’s decline was a “huge correlated move” alongside the Nasdaq, as investors assessed the consequences of the election results.
The decline gathered pace as leveraged traders faced forced liquidations across cryptocurrency derivatives markets.
As crypto.news previously reported, approximately $1.08 billion in leveraged positions were liquidated over 24 hours on November 5, according to CoinGlass data.
Long positions accounted for $954.38 million of the total, compared with $127.30 million in short liquidations. Bitcoin alone recorded roughly $280.65 million in liquidations, while Ethereum accounted for another $174.86 million.
Futures market activity showed a similar decline in leveraged exposure. According to coinglass data, aggregate Bitcoin futures open interest fell below $26 billion from $28 billion earlier in Thursday’s session, its lowest level since mid-September.
Jasper De Maere, an OTC trader at market maker Wintermute, cautioned against drawing long-term conclusions from the sell-off.
“Let’s see where we land in the short term here; medium term still glass half full,” De Maere said in comments to crypto media.
Institutional demand had already weakened before the latest sell-off, particularly following the October 29 Binance hack.
According to Bloomberg, investors withdrew approximately $1 billion from US spot Bitcoin exchange-traded funds in the days following the attack through Wednesday. BlackRock’s iShares Bitcoin Trust accounted for roughly $900 million of those withdrawals.
The funds briefly returned to positive territory on November 4, attracting $74.6 million in net inflows after three consecutive sessions of withdrawals.
Fidelity’s FBTC attracted $236.7 million during the session, while BlackRock’s IBIT recorded $201.2 million in outflows, according to November 5 market data.
On-chain data offered another indication of the pressure facing recent Bitcoin buyers.
Glassnode analysts said in a report cited by Bloomberg that most Bitcoin held by short-term investors, generally those who purchased within the previous 155 days, was now sitting at an unrealized loss. A month earlier, nearly all coins held by this group had been profitable.
Bitcoin’s latest decline has brought the $75,000 area back into focus after the cryptocurrency failed to maintain its recovery above $80,000.
In aNovember 4 technical analysis, market analyst Paul Spirgel identified $75,001 as a key Fibonacci retracement level, followed by the 200-day moving average near $73,188.
A recovery above the 30-day moving average, then near $81,319, could weaken the bearish pattern and bring the October highs above $84,800 back into focus, according to Spirgel.
Wintermute’s De Maere identified $73,000 and $68,000 as potential downside targets in his comments to crypto media, while a sustained recovery above $80,000 would be needed to show renewed short-term strength.
Read more: IREN stock falls 17% as Bitcoin mining revenue drops 58%
