$428 Million in Crypto Positions Liquidated as Bitcoin Falls 5%
Key Facts
Bitcoin fell to about $76,500 on Thursday, November 5, down nearly 5%, after the decline erased most of its gains in the session following the U.S. elections. Decrypt said the cryptocurrency had returned to levels close to those recorded before it rose above $80,000 on Wednesday. The decline came amid a broad sell-off in AI-linked stocks, weighing on riskier assets. The drop was accompanied by an increase in liquidations of leveraged positions in the cryptocurrency market. According to Decrypt, about $428 million in long positions were liquidated in one hour. In a later update, CoinDesk estimated crypto derivatives liquidations at more than $1 billion over 24 hours, most of them from positions betting on prices rising.
The decline spread to most major cryptocurrencies, with about 90% of the top 100 trading lower during the sell-off, according to Decrypt. Ether fell more than 5% in the same report, indicating that the pressure was not limited to Bitcoin. Long-position liquidations show how a rapid decline can force the closure of bets financed with borrowed money, adding sell orders to market activity. The figures covered two different time frames: about $428 million in one hour and more than $1 billion in crypto derivatives over 24 hours. CoinDesk said most of the day’s liquidations came from bullish positions. The price drop thus coincided with investors reducing positions held in expectation of further gains.
In equities, chipmakers and technology infrastructure stocks fell as selling intensified in the AI sector. Nvidia closed down 9.3%, while AMD fell 17.3%, according to Associated Press data. Decrypt said the Philadelphia Semiconductor Index lost about 8% during the sell-off and Tesla fell nearly 9.5%. The S&P 500 fell 4.4%, its worst session since the market turmoil linked to tariffs in April 2025, while the Dow Jones fell 3.4% and the Nasdaq 5.5%. The Nasdaq also ended the session down 11.9% from its record high set in October, entering correction territory, according to the Associated Press.
Investor concerns over AI spending converged with worries about the effect of political shifts on data-center construction. The Associated Press said Democratic victories increased the likelihood that governments would press to halt construction of more data centers, facilities supported by major investments in chips, energy and services. CoinDesk said investors feared political opposition could slow construction of the data centers powering the AI boom. It added that doubts about returns on AI investments and disappointing results from chip companies added to the pressure. Reuters said chip stocks recorded their second-largest decline ever, as investors focused on the possibility that Democrats would use their control of both chambers of Congress to slow data-center construction. These reports do not establish that the election result alone triggered the sell-off, but present it as one among several concurrent concerns.
Markets had risen in the session before the decline, with the S&P 500 gaining 1.6% on Wednesday, the Dow Jones rising 3% and the Nasdaq climbing 1.4%, according to the Associated Press. The gains followed the midterm elections, which gave Democrats control of both the House and Senate. But Decrypt said Bitcoin’s rise on Wednesday included pressure on short positions, and futures data pointed to investors repositioning rather than a comparable influx of new buyers. In Thursday’s session, the yield on the 10-year U.S. Treasury note fell to 4.84% from 4.90% at Wednesday’s close. The yield stood at 4.95% on election night and above 5.30% in the previous month, according to the Associated Press. The yield fell despite reports of a decline in jobless claims and stronger-than-expected worker productivity over the summer.
Traders’ comments reflected fragile sentiment in technology stocks during the session. Reuters quoted Keith Lerner of Truist as saying: "We are now seeing something like a strike by buyers in technology stocks, and the rubber band may stretch further to the downside." This coincided with a broad decline in chip stocks and the spread of concern to cryptocurrencies, where liquidations showed how exposed long bets were to a sharp drop. In the interest-rate market, Reuters reported that traders pushed back their expectations for the next U.S. interest-rate increase to March. The shift in expectations came amid Thursday’s market turmoil. The Nasdaq was, according to the Associated Press, 11.9% below its high set in the previous month.