Bitcoin moved back above $76,000 on Friday after briefly slipping beneath the psychological level during Thursday’s technology-driven market downturn.
The cryptocurrency recovered the $76,000 threshold following a sharp decline during U.S. trading hours on Thursday. The sell-off wiped out Wednesday’s post-election gains as spot Bitcoin ETFs experienced significant withdrawals and falling technology stocks weakened investor appetite for risk.
Despite the recovery, Bitcoin remains down more than 5.3% over the past 24 hours. The broader CoinDesk 20 (CD20) index also declined 6.28% during the same period.
According to SoSoValue, U.S.-listed spot Bitcoin ETFs recorded $430.2 million in net outflows on Thursday. Fidelity’s FBTC accounted for the largest share, with $199.9 million in withdrawals, while BlackRock’s IBIT recorded another $105 million in outflows.
The latest withdrawals reversed the previous day’s $74.6 million in inflows. This pushed the week’s cumulative net outflows through Thursday to $869.8 million.
The decline in cryptocurrencies followed a major sell-off across U.S. equity markets. The Nasdaq plunged 5.5%, while the S&P 500 lost 4.3% on Thursday. Analysts at FalconX and GSR connected the weakness to concerns that Democrats’ midterm election victory could slow AI data center development, further intensifying questions about the profitability of heavy infrastructure spending.
Leveraged Liquidations Add to Bitcoin Selling Pressure
Forced closures of leveraged trades further accelerated the cryptocurrency downturn. CoinGlass reported that $1.26 billion in crypto positions were liquidated over 24 hours, including $1.12 billion in long positions held by traders expecting prices to rise.
The sell-off in traditional equities is increasingly affecting the cryptocurrency market as institutional investors reduce exposure to alternative assets to manage liquidity requirements.
Simon-Peter Massabni, head of business development at broker XS.com, explained that asset managers were selling alternative investments to meet margin calls and reduce leverage across their portfolios.
Bitcoin’s previous recovery also lacked some important signs of strong buying demand. Futures open interest remained relatively unchanged during Wednesday’s rebound, indicating limited growth in leveraged market participation.
Additionally, Bitcoin traded below its Binance price on Coinbase, pointing to weaker buying activity among U.S. investors and suggesting that the recovery lacked strong domestic demand.
