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1. Why is bitcoin dropping on November 5?
Bitcoin fell below $76,000 on Thursday, November 5, 2026, after a sharp selloff in artificial-intelligence-linked shares spread from equities into digital assets. The Nasdaq dropped nearly 6%, its worst session since the April 2025 tariff announcements, and more than $1 billion in leveraged crypto positions were liquidated within 24 hours.
The immediate answer to why bitcoin is dropping is a change in risk appetite rather than any development specific to crypto. Traders sold the assets that had been most exposed to the AI investment theme, and bitcoin, which has moved closely with technology stocks in recent months, followed. The price of about $76,138 left the largest cryptocurrency roughly 5.5% lower over the previous 24 hours.
For readers trying to place the move in context, it helps to separate cause from amplification. The cause, as described by several market participants, was a reassessment of the AI investment theme after the midterm elections and a round of weak chipmaker earnings. The amplification came from leverage, thin positioning after a short-covering rally and the tight correlation between technology shares and digital assets. Each of those factors made the drop larger than the news alone might have justified, and each can fade as quickly as it appeared if conditions calm.
That decline erased most of the gains made on Wednesday, when markets rallied after the result of the U.S. midterm elections became clear. The speed of the reversal, from relief to losses within a single day, is what caught many participants off guard and what amplified the move in derivatives markets.
2. A rout that began with chip and AI stocks
The pressure started in equities. The Nasdaq was down almost 6% on the day, putting it on course for its weakest close since the period in April 2025 when the administration's tariff plans rattled global markets. A semiconductor sector index slid by more than 10% in early trading, an unusually large move for a benchmark that tracks some of the most widely held companies in the market.
Companies that mine bitcoin were hit especially hard. Many of them have been repositioning their operations toward AI computing, renting out data-center capacity to technology customers, and investors treat their shares as a blend of crypto and AI exposure. Those stocks fell between 15% and 20%, a sharper drop than either bitcoin itself or most large technology names.
Crypto-related equities outside mining also suffered. Coinbase, the largest U.S. crypto exchange, lost roughly 10% to 15%, trading near $135.32. Stablecoin issuer Circle and digital-asset custody firm BitGo fell by a similar margin, with Circle near $67.24 and BitGo near $4.61. Strategy, the company best known for holding bitcoin as a treasury asset, declined 9.6% to about $128.25.
3. How did the midterm elections feed the selloff?
Investors were still absorbing Tuesday's U.S. midterm elections, which handed Democrats control of both chambers of Congress. The market concern is that a more opposed legislature could slow the construction of data centers, the physical backbone of the AI boom and an increasingly important source of revenue for bitcoin miners.
Carlos Guzman, vice president of research at digital-asset trading firm GSR, said the elections appeared to be the trigger for Thursday's move because of worries about greater opposition to data-center expansion. He added that investors had already been asking whether the enormous sums being spent on AI infrastructure would generate adequate returns, and that the election result gave that doubt a new political dimension.
Disappointing earnings from chipmakers added to the pressure, Guzman said. When the companies that supply the hardware for AI buildouts report results that fall short, it reinforces the argument that expectations had run ahead of reality, and it tends to spread quickly to anything perceived as a related bet.
Joshua Lim, global co-head of markets at institutional crypto brokerage FalconX, described the dynamic as fresh selling returning as the implications of a slower data-center buildout came into focus. He characterized Wednesday's relief rally as driven largely by short-covering after what he called a well-telegraphed result, meaning that much of the optimism came from traders closing bearish positions rather than from new buyers entering the market.
4. What happened to other cryptocurrencies?
Major cryptocurrencies held up somewhat better than AI-linked shares. Bitcoin was down about 5.5% over 24 hours, which put it back near the levels it traded at before Wednesday's rally began. Ether, Solana (SOL), XRP and Hyperliquid fell slightly more, in a range of roughly 6% to 7%.
The comparison matters because crypto is often described as the highest-beta corner of risk assets, expected to fall by more than stocks when sentiment sours. On Thursday the picture was more mixed: equities tied directly to AI dropped by double digits in several cases, while the largest tokens lost mid-single-digit percentages. That relative resilience is the basis for the more constructive reading offered by some market participants.
The broader group of large-cap tokens moved in the same direction, reflecting the high correlation across assets that analysts described. When the cause of a selloff sits in another market, differences between individual tokens tend to shrink, because traders reduce risk across the board rather than choose between assets.
5. How big were the crypto liquidations?
More than $1 billion in leveraged positions were liquidated across crypto derivatives venues over 24 hours, according to CoinGlass, and most of the forced closures hit bullish bets. It was the largest liquidation wave since at least October 28 and 29, when bitcoin fell from almost $82,000 to $76,000.
A liquidation occurs when a trader borrows to take a large position and the market moves far enough against them that the exchange closes the trade automatically. Because those forced sales add to selling pressure, they can push prices lower and trigger further liquidations, a feedback loop that often exaggerates the initial move. Traders had piled into leveraged long positions during Wednesday's rebound, which left them exposed when sentiment flipped.
Guzman said Wednesday's relief rally reflected optimism about the geopolitical situation after the midterm results, and that sentiment reversed on Thursday as a pullback in risk appetite was magnified by leverage. In his reading, the scale of the crypto decline owed as much to the positioning of traders as to the news itself.
6. Is the outlook still 'glass half full'?
Jasper De Maere of market maker Wintermute cautioned against drawing firm conclusions from a single day of selling. He said crypto had performed relatively well compared with AI stocks during the turmoil, and that broader adoption continues to improve the longer-term outlook for the asset class.
De Maere described the short term as uncertain and the medium term as "glass half full," while noting that correlations across assets are running high. He suggested that investors look for bargains that could emerge over time as markets settle, an approach that depends on tolerance for further volatility in the near term.
The contrasting views from FalconX, GSR and Wintermute illustrate the range of interpretations available to traders. One argues that the earlier rally was thin and its reversal predictable, another points to a structural worry about AI spending and politics, and the third emphasizes that crypto has not suffered as much as the sectors at the center of the storm.
7. Why do AI stocks and bitcoin move together?
The link between AI shares and bitcoin runs through several channels. Both are widely viewed as speculative, growth-oriented assets whose prices depend heavily on investor confidence in the future, so they tend to rise together when liquidity is plentiful and fall together when investors reduce risk. Funds that hold both can be forced to sell one to cover losses in the other, which strengthens the correlation in stressed markets.
A more direct connection comes from bitcoin miners. These companies operate large facilities with cheap power and cooling, the same ingredients that AI developers need for data centers. Many have signed or pursued agreements to host AI workloads, and as a result the market now prices them partly on the strength of the AI buildout. A threat to that buildout, whether political, financial or technological, therefore lands on mining stocks first and can spill into bitcoin sentiment more generally.
Crypto exchanges and stablecoin issuers are tied to the same sentiment cycle for a different reason. Their revenues rise with trading volume and asset prices, so a sudden fall in risk appetite tends to depress their shares even when the underlying business has not changed. That explains why Coinbase, Circle and BitGo dropped by similar percentages to one another on the same day.
8. What to watch next
The next signals are likely to come from the same places that drove Thursday's move. Chipmaker earnings and any further guidance on data-center spending will indicate whether the AI trade is stabilizing, while statements from the incoming Democratic majority on energy use, permitting and oversight of data centers will show how serious the political obstacles are.
Friday's calendar adds little certainty, since traders will also be watching broader economic data and central bank commentary for signs of whether the pullback in risk appetite is spreading beyond technology. Until those inputs arrive, market participants are likely to keep position sizes modest, which could leave prices sensitive to even small shifts in sentiment and keep trading ranges wide through the coming sessions.
For crypto specifically, the key variables are the level of leverage returning to derivatives markets and whether bitcoin can hold the $76,000 area that it reached after the October 28-29 decline. A second failure at that level would add to the case that the market remains tightly tied to technology equities, while a stabilization would support the view that Thursday was a leverage flush rather than a change in trend.