US Stocks and Crypto Plunge, Triggering $1.03B in Liquidations After Midterm Results

TLDR:

• The Nasdaq fell 5.10%, the S&P 500 dropped 3.43%, and the Dow declined 2.41% in intraday trading.
• Bitcoin fell 5.97% to $75,695.68, while Ether dropped 7.29% to $2,247.74 on Binance market data.
• CoinGlass data shows $1.03 billion in liquidations over 24 hours, with $818.90 million in longs in four hours.
• The Kobeissi Letter called the downturn more technical than fundamental, citing leverage and AI regulation fears.

US stocks and crypto plunge as investors reacted to Democrats winning both chambers of Congress. Traders are concerned that the new majority may tighten rules on the artificial intelligence industry.

Democrats also plan to investigate Trump family business dealings, including crypto-related ventures. The Nasdaq Composite fell 5.10% in intraday trading, while the S&P 500 dropped 3.43%.

The Dow Jones Industrial Average declined 2.41%, and major digital assets fell sharply as well.

Crypto Markets See Heavy Liquidations

During the US stocks and crypto plunge, Bitcoin fell 5.97% to $75,695.68, according to Binance market data. The asset touched a low of $75,568 during the session. Ether dropped 7.29% to $2,247.74, after reaching a low of $2,236.78. Both assets moved lower alongside equities.

CoinGlass data shows that $879.92 million in crypto positions were liquidated over the past four hours. Long positions accounted for $818.90 million of that total. Short positions made up the remaining $61.02 million. The data points to a sharp rise in forced selling within hours.

Over the past 24 hours, total liquidations reached $1.03 billion. The wave affected 198,192 traders. Meanwhile, the largest single liquidation occurred on Binance’s ETHUSDT pair at $10.94 million. The figure shows how widely the selloff reached.

The US stocks and crypto plunge came as both markets declined at the same time. Most forced closures came from traders holding bullish bets. Market participants watched the moves closely as volatility increased through the session.

Kobeissi Letter Points to Regulation Concerns

The Kobeissi Letter shared its view on the selloff in a post on X. The firm asked what fundamentally changed over the previous 24 hours. It said the Midterm Election results alone could not explain the decline, since markets had priced in the outcome.

On today's stock market crash:

As an investor, on days like today, you have to ask yourself one question: What fundamentally changed over the last 24 hours?

The shift in the fundamental backdrop cannot be attributed solely to the Midterm Election results; markets had already…

— The Kobeissi Letter (@KobeissiLetter) November 5, 2026

According to the post, one likely catalyst is concern over a possible ban on AI or severe regulation. Democratic lawmakers recently called for limits on advanced AI development.

Some also called for an outright ban on artificial superintelligence. The firm said these calls may have added to the sudden shift in sentiment.

However, the Kobeissi Letter does not expect an outright ban to happen. It said enforcing such a ban would mean the US surrendering its AI lead to China.

The firm also said the decline does not mean AI is over. The post called this moment part of the biggest technological revolution in human history.

Instead, the firm described the move as a sudden sentiment shift meeting excessive leverage. It said this combination may have triggered forced liquidations by several major institutional investors.

Therefore, it called the downturn more technical than fundamental, while regulation concerns remain legitimate. It described price action as neither orderly nor rational. The firm advised investors to stay calm as the US stocks and crypto plunge unfolded.