On Thursday, Bitcoin’s price tumbled below $76,000, reflecting the intense sell-off in risk assets across global markets. According to Bitstamp data, Bitcoin dipped to $75,463, marking its lowest point since September 16, with intraday losses exceeding 6%.
Stock Market Downturn Puts Pressure on Cryptocurrencies
Post-midterm election optimism in the United States was short-lived. The rally sparked by Democratic gains in both the House of Representatives and the Senate quickly reversed due to heavy selling in technology stocks. The S&P 500 fell by 2.7%, while the Nasdaq Composite Index dropped 4.2%, reaching its lowest level since July 29.
Investor departures from technology stocks significantly influenced the market’s directional shift. Jordan Watson, a portfolio manager at Tandem Investment Advisors, indicated that turbulence may persist as markets digest the election outcomes and their potential policy ramifications.
Jordan Watson remarked, “The post-election surge should not be seen as a definitive sign of relief for markets, as uncertainty remains prevalent.”
Economist Mohamed El-Erian pondered whether the political balance in Congress could genuinely decelerate the technology sector in the long term, expressing caution about such expectations held by many.
Oil Price Spike and Liquidations Intensify Market Pressure
Reports of new attacks on tankers in the Middle East sent oil prices soaring. WTI crude climbed above $90, while Brent crude rose by 2.5%, approaching $97. The hike in energy prices further weakened the already fragile risk appetite in the market.
The crypto derivatives market experienced a sharp unwind, with CoinGlass data showing that approximately $500 million in positions were liquidated during the early part of U.S. trading hours. Over the past 24 hours, total liquidations neared $850 million.
The liquidation of approximately $500 million in positions during just the first segment of the U.S. trading session highlighted the rapid intensification of the selling pressure in the crypto market.
Key Moving Averages Present Technical Challenges
Bitcoin has approached the lower boundary of its trading range from the past month. The price briefly dipped below the 50-week simple moving average located at $75,733, a level closely monitored for assessing the medium-term outlook.
Crypto analyst Rekt Capital suggests that Bitcoin might be mirroring its price behavior from May. Back then, following a period of sideways movement around $80,000, a downward break led to a deeper retracement, reaching $57,000 by the end of June.
