According to Woofun AI, as the Democratic Party took control of the US Congress, market concerns over potential risks in the artificial intelligence sector intensified sharply, triggering a synchronized sell-off across mainstream cryptocurrencies and traditional stock markets on Thursday.

Bitcoin dropped significantly to around $75,200, marking its lowest level since mid-September; Ethereum briefly fell to $2,206, with an intraday decline exceeding 7%.

This systemic decline not only hit crypto-native assets hard but also spilled over into related publicly traded companies, with Strategy Inc. (MSTR.US) and Bitmine Immersion Technologies Inc. (BMNR.US) shares plunging 9.29% and 12.56% respectively, demonstrating the spread of risk-averse sentiment from traditional capital toward the crypto sector.

Data compiled by Woofun AI shows that the deleveraging process in the leveraged market is accelerating. According to CoinGlass statistics, approximately $1.2 billion in funds were forcibly liquidated in the cryptocurrency derivatives market over the past 24 hours, with as much as $1.1 billion coming from long position liquidations, reflecting the fragility of previous bullish bets.

Meanwhile, Bitcoin open interest declined by 1.78% within 24 hours, indicating that some traders are actively reducing their risk exposure.

However, market sentiment shows a significant divergence: although the Crypto Fear & Greed Index has once again fallen into "fear" territory, retail and whale investors engaged in derivatives trading on the Binance platform have unexpectedly turned "extremely bullish."

This extreme sentiment divergence suggests enormous cognitive disagreement within the market and sets the stage for subsequent price volatility.

On the traditional stock market side, gains accumulated after the midterm elections were completely wiped out. The Dow Jones Industrial Average plummeted 1,833.06 points, or 3.44%, closing at 51,523.06; the S&P 500 fell 4.36% to close at 7,353.73; and the tech-heavy Nasdaq Composite suffered the steepest decline at 5.52%, closing at 24,315.00.

All three major indices recorded their worst single-day performance since April 2025.

The core driver of the decline was investor concerns over a slowdown in data center construction, particularly in the Texas region where next-generation AI processing facilities are planned for deployment, directly undermining the valuation logic of tech growth stocks.

It is worth noting that macroeconomic data did not deteriorate in tandem. Initial US unemployment claims for the final week of October fell by 5,000 from the previous reading of 194,000 to 189,000, below the market expectation of 196,000, indicating that the labor market remains resilient and that the current sell-off stems more from a repricing of specific industry prospects rather than a collapse in macroeconomic fundamentals.

Renowned cryptocurrency analyst and trader Michaël van de Poppe pointed out that Bitcoin has shown relative resilience during this correction, with its decline comparable only to the drop seen in March 2020 at the onset of the global pandemic.

He predicted that Bitcoin's bottom would emerge on Friday and would most likely be established after breaking below the $75,000 mark.

He emphasized that tomorrow will be a critical day, as the Nasdaq has just experienced one of its worst trading days in a long time, and while Bitcoin has also come under pressure, only March 2020 saw worse conditions.

He expects the Nasdaq to bottom tomorrow, and Bitcoin may also bottom after falling below $75,000. Currently, market volatility is extremely high, and investors need to be wary of severe short-term fluctuations.

On-chain analytics firm Santiment further noted that Bitcoin's post-midterm-election trajectory has been completely opposite to widespread market expectations.

Initially, as market sentiment eased, bullish social media commentary increased significantly, but the sharp price drop on Thursday subsequently triggered a flood of bearish discussion.

Santiment added that retail traders tend to follow the herd and buy when prices rebound, and panic-sell when prices fall. Precisely because of this, extreme sentiment movements may instead serve as valuable contrarian signals.

The current situation favors waiting for a market rebound rather than continuing to chase falling assets.

In the two days since the Democratic Party took control of the US Congress, cryptocurrency movements have run counter to widespread market expectations. The sentiment relief brought by the election prompted a surge in bullish commentary, which surprised many traders, but the subsequent price decline quickly reversed that optimistic expectation.

This "punitive" market reaction indicates that the impact of macro-political events on crypto assets is not linear but is amplified through sentiment leverage. Investors need to interpret market signals more cautiously and avoid making contrarian moves when sentiment becomes extreme.