More than $1 billion in crypto positions were liquidated in 24 hours as Bitcoin fell to its weakest intraday price since August 21. The crypto market retreat followed a brutal selloff in AI stocks, while midterm election victories raised concerns that tougher AI regulation could slow construction of data centres.
CoinGlass data showed $1.05 billion in liquidations across tracked markets over the period, with 88.2 per cent coming from long positions that had bet on rising prices. Bitcoin touched $74,780.91 before recovering slightly to trade near $75,570, its lowest level in 77 days. The rout followed a 5.52 per cent drop in the Nasdaq Composite, its worst session in 19 months, and a fall of more than 12 per cent in the Philadelphia semiconductor index. Nvidia alone lost more than 9 per cent.
Democratic victories in Tuesday's midterm elections raised concerns that tougher AI regulation could slow construction of the data centres behind this year's chip rally. The S&P 500 lost 4.36 per cent on Thursday, erasing roughly $3 trillion in market value across its constituent companies.
Liquidation occurs when an exchange automatically closes a leveraged position because its collateral is no longer sufficient, sometimes adding selling pressure to an existing decline. Unlike normal trading, in which investors can handle any unrealised loss, trading with leverage gives a manoeuvre window that can end in the loss of all funds once an asset moves above or below a specific price.
Bitcoin accounted for $267.20 million of the total liquidations, with 88.9 per cent from long positions. Ethereum recorded $167.14 million, 81.1 per cent of it long. The 80-20 per cent gap between long and short liquidations matched the sentiment tracked by the Fear and Greed Index, which stood at 28 points out of 100, approaching extreme fear. A week earlier, before the midterms, the index was neutral.
A stronger-than-expected US October jobs report also increased expectations of another Federal Reserve rate hike in December. Higher borrowing costs can weigh on speculative markets, leaving crypto exposed even as chip shares recover.
Technical indicators show Bitcoin trading below both its 50-day exponential moving average near $79,756 and its 200-day EMA around $76,497. The Relative Strength Index reads 37.7, below the neutral 50 but above the 30 level generally considered oversold. The Average Directional Index is at 19.7, typical of trendless states, though the negative directional indicator exceeds the positive one, pointing to weak but bearish directional pressure.
Immediate support is at $74,780, the intraday low. A daily close below that level would shift attention toward the $73,000 to $72,500 area around August's breakout, followed by the psychological $70,000 level if that zone fails. On a recovery, Bitcoin first faces the 200-day EMA near $76,497.
Analysis
Why This Matters
- Forced liquidations of this scale can amplify market downturns, creating a cascade of selling pressure as leveraged traders are closed out.
- The simultaneous falls in crypto and AI stocks suggest growing correlation between digital assets and high-growth tech, making crypto more vulnerable to broader risk-off moves.
- The swing from neutral to near-extreme fear in a week signals a sharp shift in trader sentiment that could depress prices further if it deepens.
Background
Liquidation events occur regularly in crypto markets, but $1 billion-plus days are relatively rare and often mark periods of heightened volatility. The midterm elections added a new layer of uncertainty, with Democratic gains reviving talk of AI regulation that could slow data centre investment. The Federal Reserve's rate trajectory remains a key factor for all speculative assets.
Key Perspectives
Traders and market participants: The data shows that the vast majority of forced closures were on long positions, reflecting that most leveraged traders had been betting on continued price rises and were caught out by the sudden decline.
Technical analysts: Charts show Bitcoin trading below its key moving averages and the RSI at 37.7, indicating bearish short-term momentum but not yet in oversold territory. The ADX at 19.7 suggests a lack of strong trend direction, though negative pressure is building.
What to Watch
- Whether Bitcoin can hold the $74,780 support level on a daily close; a break below could trigger further downside toward $73,000 or $70,000.
- The Fed's next decision on interest rates in December, with a stronger jobs report increasing the likelihood of another hike.
- The direction of AI stocks, which led the broad market selloff and may continue to influence crypto sentiment.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedCrypto liquidations exceeded $1 billion over 24 hours.Decrypt: “CoinGlass showed $1.05 billion in liquidations across its tracked markets over 24 hours”
- SupportedBitcoin hit an 11-week low.Decrypt: “Crypto Liquidations Top $1 Billion as Bitcoin Tests 11-Week Low.”
- SupportedLong positions accounted for about 88% of liquidations.Decrypt: “Long positions, which profit when prices rise, accounted for $930.04 million, or 88.2%, compared with $124.69 million in shorts.”
- SupportedThe crypto retreat followed a selloff in AI stocks, alongside forced closures in derivatives markets.Decrypt: “The crypto market retreat followed a brutal selloff in AI stocks and another round of forced closures in derivatives markets.”
- Reports differBitcoin touched $74,780.91.Decrypt: “Bitcoin fell as low as $74,780.91, its weakest intraday price since August 21.”
- SupportedThe low was Bitcoin’s weakest intraday price since August 21, 77 days earlier.Decrypt: “its lowest intraday reading since August 21, 77 days earlier.”
- SupportedThe Nasdaq Composite fell 5.52%, its worst session in 19 months.Decrypt: “The Nasdaq Composite fell 5.52%, its worst session in 19 months”
- SupportedThe Philadelphia semiconductor index fell more than 12%, while Nvidia lost more than 9%.Decrypt: “the Philadelphia semiconductor index plunged more than 12% and Nvidia alone lost over 9%.”
- SupportedDemocratic victories in Tuesday’s midterm elections raised concerns that tougher AI regulation could slow data-centre construction.Decrypt: “Democratic victories in Tuesday's midterm elections raised concerns that tougher AI regulation could slow construction of the data centers behind this year's chip rally.”
- SupportedThe S&P 500 fell 4.36% on Thursday, erasing roughly $3 trillion in constituent-company market value.Decrypt: “The S&P 500 lost 4.36% on Thursday, erasing roughly $3 trillion in market value across its constituent companies.”
- SupportedA stronger-than-expected October US jobs report increased expectations of another Federal Reserve rate hike in December.Decrypt: “A stronger-than-expected U.S. October jobs report also increased expectations of another Federal Reserve rate hike in December.”
- SupportedBitcoin was below its 50-day EMA near $79,756 and its 200-day EMA around $76,497.Decrypt: “The 50-day exponential moving average, or EMA, gives more weight to recent prices and sits near $79,756, above the 200-day EMA around $76,497. That ordering remains bullish on a longer view, but Bitcoin is now trading below both averages”
