Bitcoin crashes 6% to 7-week low as US stocks erase election gains
Bitcoin saw sudden downside at the Wall Street open as stocks witnessed a snap sell-off, reversing post-election gains.
Bitcoin (BTC) fell below $76,000 on Thursday as risk assets abruptly reversed their US midterm elections rally.
Key points:
- Bitcoin fell to $75,463 its lowest levels since Sept. 16, amid a worsening stock sell-off.
- Risk assets gave back gains from the US midterm elections, with the Nasdaq Composite Index dropping 4.2%.
- BTC/USD briefly fell below its 50-week simple moving average (SMA), at $75,733, putting the level’s role as support under pressure.
Data from TradingView showed BTC/USD shedding more than 6% to $75,463 on Bitstamp, its lowest levels since Sept. 16.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
After making swift gains on the back of a Democrat sweep of the US House of Representatives and Senate, equities saw sharp selling on Thursday as traders rotated out of tech. The S&P 500 fell 2.7%, while the tech-heavy Nasdaq Composite Index lost more than 4% to hit its lowest levels since July 29.
Nasdaq Composite Index one-day chart. Source: Cointelegraph/TradingView
Oil rebounded amid reports of fresh strikes on tankers in the Middle East and uncertainty over what steps Democrats may take to resolve the US-Iran war. WTI crude returned above $90 per barrel, while Brent gained 2.5% to approach $97.
CFDs on WTI crude oil one-day chart. Source: Cointelegraph/TradingView
“We may be headed for more volatility as investors digest the election results and potential policy implications,” Jordan Watson, a portfolio manager at Tandem Investment Advisors, told CNBC. Watson added that equities gains following the midterm results should not be treated as an “all-clear signal.”
Previously, Cointelegraph reported on concerns that Democrat policies could be less favorable to the AI sector, potentially curbing already precarious capital expenditure plans.
Economist Mohamed El-Erian questioned whether the change in US political trajectory would really have a long-term negative impact on the tech sector. “Will the shift in Congress actually slow tech down? If yes (as many assume, though I’m less sure), can the rest of the market and economy thrive without the shield of tech earnings and spending?” he wrote in a blog post.
El-Erian described the day’s tech-stock weakness as “not surprising.”