According to Woofun AI, the price of Bitcoin has dropped to around $75,000. This sharp fluctuation is directly due to the collective collapse of AI-related technology stocks in the US stock market. As the dust settles in the US midterm elections, market concerns that the data center industry will face stricter political regulation quickly ferment, triggering an overall sell-off of risky assets. In the digital asset sector, this fear was further amplified by a chain reaction in the derivatives market, and leveraged positions worth more than $1 billion were forced to close in a very short period of time, increasing downward pressure on prices.
Judging from the specific transaction data, the downward trend in the market is clearly reflected in all major platforms. As of 8:08 a.m. on the 6th, the transaction price of BTC was reported at 102.5 million won on the Korean digital asset trading platform Upbit, a sharp drop of 5.38% from the price at 9 a.m. on the previous trading day.
Meanwhile, data from the global trading platform Binance showed that the price of BTC fell 6.20% in 24 hours, and the latest price was $70,5416. Other mainstream coins were not spared, with ETH falling 8.81% to $2,213; XRP falling 7.90% to $1.20.
According to data compiled by Woofun AI, in the past 24 hours, about $1,1702 million of forced liquidation events occurred in the cryptocurrency derivatives market. Among them, the total amount of BTC-related liquidations was approximately US$342.5 million. It is worth noting that in this part of the liquidation, up to 90.9%, or about US$276.49 million, were long positions, indicating that leveraged funds previously betting on price increases have suffered a devastating blow.
The current turmoil in the crypto market is closely linked to the severe shock in the traditional US financial market. The day before, the New York stock market experienced its worst single-day sell-off since the tariff shock in April last year. The S&P 500 index fell 4.4%, making the biggest one-day decline recently; the Nasdaq index fell 5.5%; while the Nasdaq 100 index, which is dominated by technology stocks, fell sharply by 6.4%, recording the biggest decline since March 2020. The semiconductor industry was particularly hard hit. The Philadelphia Semiconductor Index plummeted 12%, and leading companies such as Nvidia (NVDA.US), Qualcomm (QCOM.US), and Anmou International Technology (ARM.US) led the market decline.
The Nasdaq 100 constituent stocks alone evaporated about $2330 billion in market capitalization in a single day. Analysts pointed out that the core logic of the collapse is that after the midterm elections, the Democratic Party controlled both houses of the Senate and the House of Representatives, and the market generally expects data center construction to face more political restrictions and regulatory resistance. Joshua Lin, co-head of the global market at FalconX, pointed out that as the market began to fully reflect the negative impact of the slowdown in data center construction on demand for artificial intelligence chips and the performance prospects of related companies, a new wave of sell-offs followed. At the same time, he analyzed that the upward trend after the previous midterm elections was largely due to short positions being closed due to market expectations, rather than improvements in fundamentals.
Carlos Guzman, vice president of GSR Research, further analyzed the changing market mentality. He believes that the market originally had doubts about the profitability of investment in artificial intelligence infrastructure, and the midterm election results brought additional political pressure. As opposition to data center expansion grows, investors are increasingly worried that AI infrastructure construction will slow down, further fueling the original return on investment controversy. Guzman said that although the midterm election results had driven a market rebound due to expectations of an improvement in the geopolitical situation, the phenomenon of leveraged liquidation further intensified the downward trend as venture asset investment mentality once again turned cautious. Those leveraged buying operations that expected the price to rise were liquidated one after another as the BTC price fell, creating a negative feedback cycle.
However, Wintermute's Jasper Demel offered a different perspective. He believes that although AI-related technology stock prices have plummeted, the decline in the digital asset market has been relatively limited and has maintained a relatively stable trend. Looking at the medium term, the outlook remains positive, as the continued popularity of digital asset applications will support the long-term development of the market.
Currently, the market is focusing on the upcoming US employment report. This data may affect the monetary policy trend of the Federal Reserve System and future interest rate expectations. Investors are watching whether risk-averse asset sentiment caused by falling technology stocks will continue to spread.