Today, the cryptocurrency market saw a decline, with total market capitalization slipping by 1.33% to $2.3 trillion as of Nov. 1. Leading crypto asset Bitcoin dropped 4.3%, reaching around $69,193, while Ether, the second-largest cryptocurrency, fell 5.4%, trading near $2,495 at the time of writing.
Let’s break down the primary drivers behind today’s downward trend.
Investors in Risk-Off Mode as Trump’s Odds Drop
The crypto market’s decline marks its third consecutive down day as the uncertainty around the U.S. presidential election outcome on Nov. 5 intensifies. Former President Trump’s odds of winning the election have decreased, dropping from 67% on Oct. 30 to 61% by Nov. 1, according to Polymarket. Meanwhile, odds for Democratic candidate and Vice President Kamala Harris have risen from 33% to 39% in the same period.
The Trump Media and Technology Group (DJT) — considered by some analysts as a proxy for Trump’s election chances — has plummeted 34% over the past 72 hours, following a 352% rally in October.
U.S. stock markets were also impacted on Oct. 30, with the Nasdaq closing down by 2.7% and the S&P 500 dropping 1.7%. “The S&P 500 is on track for its biggest daily drop since September 5,” noted capital markets analyst The Kobeissi Letter in an Oct. 31 post on X.
In total, the S&P 500 saw a significant $800 billion in market cap wiped out today.
Beyond election developments, the current market is also being shaped by upcoming tech earnings reports, geopolitical concerns in the Middle East, and anticipation around the Federal Reserve’s rate decision on Nov. 7.
Over $280M Liquidated as Crypto Market Corrects
The liquidation of leveraged positions, especially long ones, has also contributed to the crypto market’s pullback today.
In the past 24 hours, crypto derivatives markets have seen over $286.1 million in liquidations, with $253 million coming from long positions alone. Within the last 12 hours, leveraged trades totaling $112.7 million were liquidated.
Across exchanges, more than 93,729 traders faced liquidations over the past day, with the largest single order occurring on Binance, involving a $5.2 million BTC/USDT trade.
When long positions are forcibly liquidated, assets are often sold off, driving prices even lower.
Bear Flag Pattern Signals Potential for Further Decline
After struggling to break through the $2.242 trillion resistance level in March, bullish momentum retreated, bringing the market cap down toward $1.81 trillion. In early August, the total market cap (TOTAL) hit a swing low at $1.69 trillion, though it has since rebounded to $2.28 trillion.
Despite this partial recovery, a bearish flag pattern on the daily chart signals the possibility of more downside. The TOTAL market cap relies on support at $2.24 trillion, and a close below this level could trigger a bearish breakout, with potential for a further drop toward the next technical target of $1.48 trillion, representing a 35% decline from current levels.
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