Bitcoin Falls Below $77,000 as Chip Selloff Spreads Into Crypto Ahead of Midterms
Bitcoin dropped about 5% on Thursday, from above $80,800 to near $76,100, as a Nasdaq selloff in chip and AI stocks spilled into crypto markets. Roughly $370 million to $400 million in leveraged crypto positions were liquidated within about an hour, most of them long bets.
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The Drop and Its Speed
Bitcoin fell roughly 5% on Thursday morning, sliding from above $80,800 to a low near $76,100 shortly after the U.S. stock market opened, according to Bitcoin Magazine Pro data. CoinDesk reported the price falling below $77,000 as the decline deepened, and noted that ZEC dropped nearly 10% and BNB fell under $700 over the same session. The reversal was fast: a short squeeze had carried bitcoin past $80,500 early in the day, and within about two hours of the opening bell it was more than $4,000 lower.
Liquidations and Leverage
Leverage amplified the move. Bitcoin Magazine reported that about $370 million in leveraged crypto positions were liquidated in roughly an hour as bitcoin broke $77,000 and ether fell below $2,300, most of them long bets. Wider tallies circulating on X put long liquidations closer to $400 million over the same period, a figure that was not independently verified. Traders who had piled into Wednesday's squeeze with borrowed money were the first to be forced out once stocks broke, and that forced selling pushed bitcoin through support near $77,000.
The Equity Trigger
The crypto move followed a sharp selloff on Wall Street. The Nasdaq Composite fell as much as 3.9% and entered correction territory, trading 10% below its record close from last month, according to CNBC as cited by Bitcoin Magazine. The S&P 500 fell about 2%, erasing Wednesday's rally, and the Russell 2000 was down 2.5% and on pace for its biggest one-day drop since June 5. U.S. stocks shed $2.3 trillion in market value within the first hour of trading, per Bitcoin Magazine's reporting. Chip and AI names led the decline, with Nvidia and Broadcom each down about 5%, Tesla off around 9%, neocloud operators CoreWeave, Nebius and IREN down between 9% and 13%, and Sandisk down nearly 19% at the time of writing. The selling began in Asia, where South Korea's Kospi closed down more than 5%.
Political and Macro Backdrop
Investors are pricing in a Democratic-controlled Congress following Tuesday's midterm elections. Reuters reported that traders fear new limits on data center buildout, and UBS analysts estimated that around 30% of U.S. data center capacity additions expected in 2028 could be at risk from construction pauses. Bitcoin has traded alongside the AI-heavy tech complex for most of the year, and many bitcoin miners have sold holdings to fund AI data centers, which links the same political risk to both assets. The macro picture offered little offset: initial jobless claims fell to 189,000, matching July's level and the lowest since 1969, against an expected 196,000. A tight labor market gives the Federal Reserve little reason to ease, leaving risk assets dependent on growth narratives such as AI.
Flows and What Comes Next
U.S. spot bitcoin ETFs took in a net $74.6 million on Wednesday, ending a three-day run of outflows, led by Fidelity's FBTC while BlackRock's IBIT saw money leave. The next checkpoints are Friday's October jobs report, October CPI on Nov. 10, and the Federal Reserve's Dec. 9 decision. House Democrats are also drafting a market structure bill ahead of taking over committee leadership in January. Traders are watching whether bitcoin can hold the $75,000 area, which has acted as support on election night and several times since August.
Why It Matters
For Traders
Bitcoin's ability to hold the $75,000 area into Friday's jobs report will be the near-term level to watch as leveraged longs have already been flushed.
For Investors
Bitcoin's continued correlation with AI-heavy equities means policy risk around data center buildout now bears directly on the crypto asset's multi-month outlook.
For Builders
Heavier reliance on leverage and miner exposure to AI infrastructure means protocols should stress-test liquidation and collateral assumptions against correlated equity drawdowns.
This article is for information only and is not financial advice. Read the full disclaimer.
