Bitcoin and Ether Erase Post-Election Rally as Liquidations Top $1.1 Billion
Bitcoin and ether gave back their post-election gains on Thursday, November 5, after a sharp selloff in United States technology and artificial-intelligence stocks spilled into cryptocurrency markets. Bitcoin fell roughly 6% to about $75,700, touching an intraday low near $75,568. Ether fared worse, dropping more than 7% to approximately $2,247.
The damage was not confined to spot prices. The decline triggered widespread forced selling in leveraged derivatives. Data from CoinGlass showed nearly $1.1 billion in crypto positions liquidated over a 24-hour window, affecting around 211,000 traders. The pace of the unwinding was brutal: about $879.92 million was liquidated in just four hours, including $818.90 million in long positions and $61.02 million in shorts.
That imbalance tells its own story. Traders had positioned heavily for continued gains after bitcoin briefly climbed above $80,000 on Wednesday. When the market turned, those one-way bets unwound in a cascade.
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How Leverage Turned a Pullback into a Cascade
The mechanics of Thursday’s slide are a textbook illustration of how leverage amplifies downside moves in crypto. Falling prices force long positions to close. Those closures generate additional selling pressure. That selling pushes prices lower still, which triggers yet more liquidations. The loop feeds on itself until the marginal leveraged buyer is flushed out of the market.
The numbers bear this out. Of the $879.92 million liquidated in the four-hour burst, more than 93% was on the long side. That is not a market being caught both ways. It is a market that had crowded into a single trade, betting that the post-election momentum would carry bitcoin decisively through the $80,000 level and beyond.
When bitcoin briefly cleared $80,000 on Wednesday, it looked like confirmation. Instead it marked a local top. Thursday’s reversal caught the majority of leveraged traders on the wrong side of the move, and the resulting cascade dragged prices down far faster than any organic selling would have.
This dynamic is well known to seasoned market participants, but it retains the capacity to surprise. Crypto’s derivatives markets have grown enormously in recent years, and the notional value of open leveraged positions now dwarfs what existed in previous cycles. That depth cuts both ways. It provides liquidity in calm markets and provides fuel for violent unwinds when sentiment shifts.
Jasper De Maere, an OTC trader at Wintermute, played down the broader significance of the immediate market moves. “What matters is that all of them seemed to be so short-lived that it actually didn’t really matter,” he said. In other words, the market absorbed the liquidation cascade and found a level without a deeper structural breakdown. That is a fair reading of the tape. It is also, in a sense, beside the point. The episode matters less for where prices settled on Thursday evening and more for what it revealed about how the market is positioned.
The Nasdaq Connection and the Political Reckoning
The trigger for the selloff lay outside crypto entirely. The Nasdaq fell sharply as investors sold technology and AI stocks, prompting leveraged funds and other investors to reduce exposure across asset classes. Crypto, as the most liquid and most heavily leveraged risk asset available, was an obvious outlet for that de-risking.
This is a pattern worth watching. Bitcoin’s correlation with equities, and with tech stocks in particular, has tightened during periods of market stress. The asset that was once pitched as uncorrelated digital gold now trades, at least in the short term, like a high-beta Nasdaq proxy. Thursday was a clean demonstration: an equity selloff with no crypto-specific catalyst produced a 6% drawdown in bitcoin and more than 7% in ether, amplified by the leverage stacked on top.
The political backdrop also shifted beneath the market’s feet. Democrats won control of both chambers of Congress in the United States midterm elections, raising uncertainty about the crypto industry’s prospects for legislation and increasing expectations of regulatory scrutiny over the next two years.
This is a material change. The industry had hoped the election would produce a more favourable policy environment in Washington. Instead, the result may force crypto companies and lobbyists to rethink their strategy entirely. A Congress controlled by a party that has shown limited appetite for crypto-friendly legislation changes the calculus for every firm with exposure to the US market, from exchanges to stablecoin issuers to protocol developers with American users.
The timing compounds the problem. The post-election rally that took bitcoin above $80,000 was, at least in part, a bet on political tailwinds. Thursday’s result inverted that thesis. Traders who bought the rally on event-related optimism found themselves holding positions justified by a narrative that the ballot box had just undermined. The liquidation data suggests many of them were leveraged when they made that bet.
What This Means for the Market Going Forward
Three lessons stand out from Thursday’s action, and none of them are new, which is precisely why they matter.
First, crypto remains acutely sensitive to stock-market shocks. The sector has matured in infrastructure, custody, and institutional access, but its price behaviour still responds to risk-off moves in equities faster and harder than most traditional asset classes. Any investor treating crypto as a diversifier needs to price in that correlation, particularly on days when the Nasdaq leads the way down.
Second, excessive leverage remains the market’s structural weakness. Nearly $1.1 billion liquidated across 211,000 traders in a single day is not a marginal event. It is a broad flushing of speculative positioning. The concentration of liquidations on the long side, more than $818 million against roughly $61 million in shorts, shows how one-sided sentiment had become after the run above $80,000. Markets that are universally positioned for upside have no natural buyers left when the trend breaks.
Third, gains driven by political or event-related optimism are fragile by construction. The rally that preceded this selloff was anchored partly in expectations of a friendlier Congress. Those expectations did not survive the election result. Prices built on narratives can reprice quickly when the narrative changes, and leveraged traders are the ones who absorb the losses when they do.
The Analytical Takeaway
The immediate market impact, as Wintermute’s De Maere noted, proved short-lived. Prices stabilised and the liquidation cascade exhausted itself. But the episode should not be filed away as noise. It exposed a market still trading as a high-beta proxy for tech equities, still carrying leverage that converts 6% price moves into billion-dollar liquidation events, and still vulnerable to political headlines that can rewrite the regulatory outlook overnight.
For the next two years, the legislative environment in Washington looks more hostile than the industry had priced in. Firms with US exposure will need to budget for scrutiny rather than lobbying for permissive frameworks. Traders, meanwhile, have been reminded that the cost of leverage is not the funding rate. It is the forced exit at the worst possible price, experienced by roughly 211,000 of them in a single session.
The post-election rally is gone. What replaces it will depend on whether the market can find a foundation in fundamentals rather than in event-driven optimism. On the evidence of Thursday, that search is only beginning.
