Bitcoin Slides Below $76K, Nasdaq Drops 4.2% Amid Oil Surge
- Bitcoin dropped below $76,000, erasing gains from the previous day.
- Approximately $428 million in crypto long positions were liquidated in one hour.
- The Nasdaq index fell 4.2% as investors rotated out of technology stocks.
- Chipmakers and data-center firms declined amid concerns over AI spending.
- WTI crude oil rose above $90 per barrel due to Middle East tanker strikes.
Bitcoin prices tumbled on Thursday, erasing the rebound seen on Wednesday. The cryptocurrency fell below $76,000, with Cointelegraph reporting a low of $75,463, the lowest level since September 16. Bitcoin dropped nearly 5% to approximately $76,500, reversing Wednesday's gains that had pushed the price above $80,000.
Nearly $850 million in crypto positioning was liquidated in 24 hours. Decrypt reported $428 million in crypto long positions were liquidated within a single hour during the selloff.
Nasdaq and S&P 500 decline on tech stock rotation
The S&P 500 fell 2.7% as traders rotated out of technology stocks following a Democrat sweep of the US House and Senate. Decrypt reported the S&P 500 declined by about 2.6% in late-morning trading.
The Nasdaq index dropped 4.2% to its lowest level since July 29, approaching correction territory. The Nasdaq dropped nearly 4%, moving toward a 10% correction from its peak.
Semiconductor and AI-focused firms face double-digit losses
Chipmakers and data-center firms experienced declines on Thursday due to concerns regarding AI spending and Democratic oversight. The Philadelphia Semiconductor Index fell about 8%. CoreWeave and Nebius saw double-digit percentage declines.
Tesla shares dropped roughly 9.5%, continuing a decline following Elon Musk's significant financial support for Republican candidates. UBS estimates that potential pauses in development could impact 30% of planned U.S. capacity additions for 2028.
Analysts weigh in on AI valuation and market volatility
Mohamed El-Erian characterized the day's weakness in technology stocks as "not surprising". Bitwise Europe analyst André Dragosch said the Democratic sweep of Congress was "largely priced in" by the market.
Swissquote senior analyst Ipek Ozkardeskaya remarked that there is going to be "some scrutiny on this aggressive AI buildout". Jordan Watson of Tandem Investment Advisors said investors should expect more volatility. Watson added that post-election gains should not be viewed as an "all-clear signal".
Ted Parkhill, CEO of Incline Investment Management, said the market is moving "from the promise of AI to the price of AI".
Broader market context and crypto sector performance
Ethereum fell by more than 5%, and 90% of the top 100 cryptocurrencies experienced losses during the selloff.
This decline follows concerns regarding rising borrowing costs, AI spending, and the recent multibillion-dollar Binance hack. On Wednesday, the market saw $378 million in short position liquidations as Bitcoin exceeded $80,000.
Rising oil prices amid Middle East tanker strikes
WTI crude oil rose above $90 per barrel, while Brent crude gained 2.5% to reach nearly $97. Cointelegraph reported that these increases were driven by tanker strikes in the Middle East and uncertainty regarding Democratic policy on the United States-Iran war.
Upcoming economic indicators and political transitions
Crypto trader Rekt Capital noted that Bitcoin is repeating behavior from May, when rangebound moves near $80,000 were followed by a breakdown to $57,000 in late June.
Traders anticipate a Federal Reserve interest rate increase in December, with the October jobs report due this Friday potentially influencing these expectations. The newly elected Congress is scheduled to take office in January.
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