Bitcoin Also Tumbles, With the 100 Million Won Mark in Jeopardy... U.S. Midterm Shock Hits Crypto Market [Crypto Briefing]

[Financial News] Bitcoin, which had recovered to the $80,000 range after the midterm elections, plunged nearly 6% amid a sharp drop in U.S. tech stocks and uncertainty over U.S. policy.
 According to CoinMarketCap, a global cryptocurrency market data site, Bitcoin was trading at $75,781, down 5.87% from the previous day, as of 8:40 a.m. on the 6th. Ethereum, the second-largest cryptocurrency by market capitalization, was trading at $2,230, down 8.04%.
On domestic cryptocurrency exchange Upbit, Bitcoin was trading at 103,055,000 won, down 4.87% from the previous day, while Ethereum stood at 3,032,000 won, down 7.08%. Other major crypto assets are also plunging. The market sentiment index edged up. The Crypto Fear and Greed Index stood at 31 (fear) that day.
The sharp drop was largely driven by selling in the U.S. stock market, led by technology shares, spreading to the crypto market. Overnight on Wall Street, the tech-heavy Nasdaq plunged 5.5%. The S&P 500 and the Dow Jones Industrial Average also fell 4.4% and 3.4%, respectively, giving back their gains from the previous day.
The shaken investment outlook for the artificial intelligence (AI) industry in particular rattled markets broadly. As the Democrats took control of both the House and Senate in the U.S. midterm elections, concerns grew that regulations on AI data center construction could be tightened.
Large-scale forced liquidations deepened the decline in the crypto market. According to crypto news outlet CoinClass, more than $1 billion in positions were forcibly liquidated in the crypto derivatives market over the past 24 hours. Most of those positions had bet on prices rising. Bitcoin’s falling price appears to be triggering further selling in a vicious cycle.
Uncertainty over the course of cryptocurrency regulatory legislation after the U.S. midterm elections is also weighing on the market. With the Democrats in control of Congress, prospects for passage of a crypto market structure bill have become unclear, while expectations that oversight and regulation of the industry could be tightened are dampening investor sentiment.
The market expects movements in U.S. stocks and whether investor sentiment recovers to determine Bitcoin’s direction in the near term. Key factors also include the release of U.S. October employment data and changing expectations for future interest-rate policy from the Federal Reserve (Fed). Some forecasts warn that volatility in the crypto market could increase further if risk aversion persists.

[email protected] Han Young-jun Reporter