The cryptocurrency market took a notable dip on Nov. 1, with total market capitalization decreasing by 1.33% to $2.3 trillion. Bitcoin, the largest cryptocurrency, dropped by 4.3% to approximately $69,193, while Ether also declined by 5.4% to around $2,495. Here’s a closer look at the forces driving today’s sell-off.
Election Concerns Weigh on Risk Markets
Uncertainty around the Nov. 5 U.S. presidential election is adding pressure to risk assets, including cryptocurrencies. Former President Trump’s odds of winning dropped from 67% on Oct. 30 to 61% on Nov. 1, according to Polymarket, while Vice President Kamala Harris’ odds rose from 33% to 39% over the same period. Trump Media and Technology Group shares, which some analysts see as reflective of Trump’s chances, dropped 34% over 72 hours, contributing to wider market concerns.
24-hour performance of large-cap cryptocurrencies. Source: Coin360
Broader Market Declines Hit Stocks and Crypto
Stock markets also felt the pressure, with the Nasdaq down 2.7% and the S&P 500 falling 1.7% on Oct. 30. Market analyst The Kobeissi Letter noted that nearly $800 billion in market cap had been wiped from the S&P 500. The market downturn reflects not only election fears but other macroeconomic concerns, including the upcoming tech earnings, Middle Eastern geopolitical tensions, and the Federal Reserve’s Nov. 7 rate decision.
High Liquidations Amplify Crypto Losses
The crypto derivatives market saw over $286 million in liquidations in the last 24 hours, with long positions accounting for $253 million. More than 93,729 traders were liquidated, with a single $5.2 million order on Binance representing the largest of these. Liquidations of long positions, which involve asset sales by brokers, can exacerbate price declines.
Source: The Kobeissi Letter
Bear Flag Suggests More Downside Potential
Despite recent recovery efforts, technical analysis shows a bearish formation. After the total crypto market cap failed to breach $2.242 trillion in March, a “bear flag” pattern is visible, indicating the potential for further downside. A close below the $2.24 trillion level would confirm a bearish breakout, potentially targeting a 35% decline to around $1.48 trillion.
As election-related and broader economic uncertainties mount, crypto investors are watching closely for signs of further volatility in the days ahead.
