Bitcoin plunged nearly 5% on November 5, 2026, erasing its post-election recovery as a major technology stock sell-off spread across cryptocurrency markets.
The cryptocurrency dropped toward $76,500 after briefly climbing above $80,000 on Wednesday, reversing gains following the US midterm elections.
Ethereum declined more than 5%, while approximately 90% of the 100 largest cryptocurrencies traded in negative territory during the downturn.
According to CoinGlass data cited in the report, approximately $428 million in leveraged crypto long positions were liquidated within one hour.
The sharp reversal highlighted growing investor concerns about artificial intelligence investments, regulatory uncertainty and borrowing costs.
AI Stocks Plunge as Wall Street Faces Heavy Losses
Technology stocks experienced substantial losses as investors questioned the profitability of massive AI infrastructure investments.
During Thursday's trading session, the Nasdaq fell nearly 4%, approaching correction territory, while the S&P 500 declined approximately 2.6%.
Semiconductor companies suffered particularly steep losses, with the Philadelphia Semiconductor Index dropping around 8%.
AI infrastructure businesses CoreWeave and Nebius also recorded double-digit declines.
The selling pressure followed growing concerns about the costs of building data centers and whether anticipated AI revenues could justify those investments.
Democrats' congressional victories added another layer of uncertainty, with investors considering potential restrictions on energy-intensive data center developments.
Democrats' Midterm Victory Raises Regulatory Concerns
Democrats' control of both congressional chambers has increased uncertainty surrounding cryptocurrency and technology regulation.
Following the November 3 elections, investors initially welcomed expectations that political gridlock could limit major policy changes.
However, sentiment deteriorated as attention shifted toward potential oversight of AI infrastructure, electricity costs and financial markets.
Voters in at least 29 US jurisdictions reportedly supported measures restricting data center expansion, although not all proposals were legally binding.
UBS estimated that potential development pauses could affect approximately 30% of planned US data center capacity additions in 2028.
For cryptocurrency companies, Democratic control also complicates efforts to revive the stalled CLARITY Act.
However, the election alone does not explain Bitcoin's decline, which coincided with wider selling across risk-sensitive assets.
$428 Million in Crypto Longs Liquidated in One Hour
Leveraged cryptocurrency positions amplified Bitcoin's rapid price movements, contributing to both Wednesday's rally and Thursday's crash.
During Wednesday's recovery above $80,000, approximately $378 million in short positions were reportedly liquidated within one hour.
Those forced closures created additional buying pressure as traders exited bearish positions.
Thursday produced the opposite effect.
Around $428 million in long positions were liquidated within an hour, triggering forced selling as Bitcoin's price declined.
The cryptocurrency market had already lost approximately $300 billion in value over the preceding month.
Lingering concerns surrounding the recent multibillion-dollar Binance hack also contributed to fragile market sentiment.
Bitcoin Faces Critical $75,000 Support Level
Bitcoin's immediate technical outlook remains uncertain after losing its $80,000 recovery level.
The decline toward $76,100 brought the psychologically important $75,000 support region into focus.
A sustained move below that level could encourage additional selling, while recovering $80,000 would improve the short-term technical picture.
Analysts also identified a potential bearish engulfing pattern on Bitcoin's daily chart, although confirmation depended on the session's closing price.
Meanwhile, Federal Reserve interest rate expectations and upcoming US employment data remain important market catalysts.
Higher borrowing costs can reduce demand for speculative assets, including cryptocurrencies and technology stocks.
For now, Bitcoin's reversal illustrates how quickly leveraged trading, macroeconomic uncertainty and stock market volatility can combine to trigger substantial cryptocurrency losses.
