On November 6, 2026, the U.S. stock market evaporated over 3 trillion dollars in market value in a single day.
The Nasdaq dropped 5.5%, the S&P fell 4.4%, and the Dow plunged 1,833 points. Nvidia fell 9.3%, AMD dropped 17.3%, and the Philadelphia Semiconductor Index fell about 12%.
VIX soared from 16.61 to 28.18, a single-day increase of 69.66%.
This is not an ordinary pullback.
In the past two years, the market's reaction to bad news has been "drop a bit, then buy back." This time is different. After this drop, the familiar buying did not emerge.
This time, the market is questioning not a company's earnings report, but the story of AI itself.
1. What Happened in 24 Hours
First, clarify the timeline, as the cause-and-effect relationship this time is cleaner than usual.
The U.S. midterm elections ended on November 3, with the Democratic Party securing both houses of Congress. On the day the news broke, the market reacted positively—uncertainty relieved, risk assets rebounded. But it only rose for one day.
In the early hours of November 6, the selling began. Tech stocks, especially the AI sector, collapsed first, and panic quickly spread to the crypto market.
By the morning of November 6, Bitcoin fell from a brief breakout above $80,000 to around $76,100, hitting a low of $75,230 during trading. Ethereum dropped to $2,209, a 24-hour decline of 7.8%. Solana fell to about $90.
In the past 24 hours, the total liquidation of crypto derivatives reached 1.239 billion dollars, with long positions at 1.099 billion and shorts only at 139 million.
This ratio is worth a closer look. One billion in long positions were liquidated, with a long-short ratio approaching 8:1.
If the decline was triggered by negative news, it typically leads to a mutual slaughter of longs and shorts, as both sides reduce positions. The stark contrast in long-short ratio indicates that this round is killing the faith of the bulls, not a disagreement between bulls and bears.
The sell-off also spread globally. South Korea's KOSPI dropped as much as 8.8% during trading, triggering a circuit breaker that paused trading for 20 minutes; the Nikkei 225 saw a maximum drop of 6.7%; Samsung Electronics fell over 10%, and SK Hynix dropped more than 12%.
By the Asian session on November 9, Bitcoin was around $73,970, hitting a low of $73,500, while Ethereum fell to $2,090, a further 24-hour drop of 6.5%.
2. Three Lines Converged at the Same Point in Time
Many people consider this as an end to the negative news cycle. This understanding is too superficial.
Upon closer inspection, it is actually three originally independent lines converging at the same time.
First Line: The Cost-Benefit Ratio of AI is Publicly Questioned for the First Time
For the past two years, AI has been the hardest narrative in the market. As long as it involves AI, valuations can rise. The market's attitude towards this story has always been "no need to calculate, just rise."
But this time, they started calculating.
The question asked is very straightforward: can several hundred billion dollars invested in data centers be earned back?
No one had seriously pursued this question before because as long as stock prices were rising, the cost-benefit ratio was not an issue—stock prices themselves were the answer. But now, as data center construction heavily relies on external financing and both financing costs and debt servicing costs are rising in a high-interest-rate environment, this calculation cannot be avoided.
In other words, the business model for AI infrastructure is based on the premise of "cheap financing." This premise held for the past two years, so no one bothered to calculate. Now that financing has become expensive, the calculations must be made.
Recent semiconductor company earnings reports failed to dispel this doubt. Qualcomm's reported mobile chip sales fell short of expectations, directly dampening semiconductor sentiment.
Joshua Lim, Global Market Director at FalconX, states the judgment clearly: investors have begun to consider the impact of a slowdown in data center construction, with the previous rebound largely stemming from a rush to cover short positions.
This means that the earlier rise was not due to optimism, but rather due to shorts being unable to tolerate their positions.
A market driven upward by "fear of missing out" will experience such a steep decline once people start calculating—because the reasons held by those who own it have never been that "it’s worth this price."
Second Line: Policy Shift Hits the Most Fragile Links
This can easily be interpreted as the "aftermath of the elections," but that's not the case.
After the Democrats secured both houses, the market's initial reaction was "uncertainty removed." But soon, investors began to reassess: the uncertainty has not been resolved, it has merely shifted direction.
From "not knowing who will win," it changed to "what will they do after winning."
And the latter is actually harder to price—because it is specific to bills, terms, and timelines.
Specifically for the AI sector, the Democratic Party’s policy direction after gaining control over both houses hits right where AI infrastructure is most vulnerable:
Data center projects may face stricter reviews regarding grid capacity, water resource usage, energy prices, and environmental impacts; local approval processes may also slow down.
This is almost a fatal blow to AI infrastructure. Because its business model is built on "being able to quickly get electricity and complete construction"—computing power is a business that races against time, and being delayed by half a year in construction might pass the market window.
What further raises market anxiety is Arizona Congresswoman Yassamin Ansari's statement on X: making the suspension of advanced AI development, regulating this "out-of-control" industry, and prohibiting artificial superintelligence a priority on the first day of the Democratic agenda.
The bill she co-sponsored to ban artificial superintelligence was introduced in the House by Greg Casar on September 24 and in the Senate by Bernie Sanders on September 23. Both versions are currently stalled in committee, not yet becoming law.
The severity of the bill far exceeds market expectations: it establishes a federal-level AI supervisory agency, suspending the training and deployment of advanced models that meet the threshold of computational power until this agency is staffed and safety rules are established; violating companies could be forcibly dissolved, and individual violators could face up to 20 years of federal imprisonment; it even lists a "global ban on superintelligence" as a U.S. foreign policy objective.
A bill that has not yet become law has prompted such a reaction from the market—this itself is the most noteworthy signal.
It indicates that the market's sensitivity has reached a fragile level. A truly healthy market would not experience drastic fluctuations due to a proposal stalled in committee.
Third Line: No Margin for Error Under High-Interest Rates
This line is the least conspicuous, but possibly the deadliest.
Take a look at the movements of funds. Walleye Capital, managing about 17 billion dollars, lost 5.9% in October, its worst single-month performance since March 2020, and has already dismantled its long-short equity team, planning to return part of its capital to investors. Systematic hedge fund Engineers Gate also dissolved most of its Synthesis equity team, with a loss of 5.5% as of October 23.
Professional players are collapsing; this is not retail panic.
The significance of this matter is: a 5% loss for retail investors wouldn’t trigger a systemic sell-off, but a 5.9% loss for a fund managing 17 billion dollars can trigger risk controls—redemption pressure, leverage ratios, withdrawal limits, each can force it to reduce positions.
And these reductions, in turn, accelerate the decline.
This is the death spiral in a high-interest-rate environment: high financing costs → low tolerance for losses → forced reduction of positions → accelerated decline → more forced reductions.
A group of traders that emerged after 2019 has never seen this cycle. They are used to the notion that "when it dips, someone will always pick it up." This time, those picking it up are quantitative funds, which are also facing redemptions.
3. The Biggest Drop Was Not Bitcoin
This section deserves special mention as it holds the most information.
This time, the hardest hit was not Bitcoin. AMD dropped 17.3%, the Philadelphia Semiconductor fell 12%, and South Korea's KOSPI experienced a circuit breaker. Bitcoin fell from $80,000 to $73,970, a drop of about 7.5%.
The crypto market was relatively resilient this time.
In the past two years, it was generally assumed that crypto and the Nasdaq were highly correlated—rising together when AI rose, and falling together when risk appetite shrank. This correlation was once regarded as a law.
But this time, the sell-off in the AI sector did not proportionally transmit to crypto.
Jasper De Maere, head of research at Wintermute, assesses that despite AI stocks performing poorly, cryptocurrencies still possess resilience, maintaining optimism for the mid-term outlook.
I’m uncertain if this is the beginning of a trend. But at the very least it indicates one thing: the main reason for this round of crypto decline is not an issue within crypto itself.
Another counter-proof is that during the same period, gold was rising. On November 9, gold on the New York Mercantile Exchange was at $4,116 per ounce, a 24-hour increase of 1.02%.
Risk assets are falling, while safe-haven assets are rising.
This is typical of a risk appetite contraction, not an independent market for any specific asset.
The connection between these three events—Bitcoin's relative resilience, gold rising, and the AI sector collapsing—points to the same judgment: the market is not selling "bad assets," but redistributing "risk exposure." Money is flowing from the most aggressive areas (AI growth stocks) to the most conservative avenues (gold), while the intermediate position (Bitcoin) is being relatively preserved.
4. The Essence of This Decline is the Transfer of Pricing Power
The first three lines discuss "why it fell," while this section addresses "what is falling."
I believe the essence of this decline is not a price drop, but the transfer of pricing power from narrative to balance sheets.
For the past two years, AI's valuation has been determined by narrative: infinite demand for computing power, steep growth curves, winner takes all. Under this narrative, a slightly higher PE ratio is acceptable because "the future is vast."
However, the narrative has one premise: it requires liquidity to support it. As long as money keeps pouring in, the narrative can self-reinforce—when prices rise, more money comes in; when more money comes in, prices rise even more.
Now, liquidity is starting to ask questions:
Can data centers earn back their investments?
Who will pay this money?
If interest rates do not drop, how much longer can this last?
Once these questions are raised, they cannot be taken back.
This is why the form of this decline is different from previous ones. Previous declines were "valuation corrections"; once they corrected, they could bounce back because the logic supporting valuations hadn’t changed. This time, the decline is "the logic being reexamined", requiring new evidence before revaluation can occur.
And the new evidence does not reside in sentiment, but in earnings reports.
This is why this round of repricing will not end in a day—it requires waiting. The money will not wait for the answers.
5. Viewing the Binance Incident Alongside This Decline
The previous article discussed the $6.3 billion stolen from Binance. When viewed in the context of the market, an interesting comparison arises.
Binance bore the full loss from the theft, stating by early November that it had replenished 95% of the stolen assets, and withdrawals were restored. It took just a few days to go from "the largest theft in history" to "users are not affected."
In contrast, this round of decline involved the liquidation of 1.099 billion dollars in leveraged long positions.
The same level of loss is covered by a company’s balance sheet on one side, while on the other side it is borne by individual retail investors.
This comparison is worth considering more deeply for everyone using leverage.
The exchange can afford to cover losses because it has a balance sheet—it can absorb a shock and then earn it back over several years. Your position does not have a balance sheet; a single shock is the endgame.
This is why the real answer to "how much leverage to use" does not depend on how accurately you see the market, but on how many times you can tolerate going to zero.
6. What to Watch Next
I do not predict price points, only observable factors.
First, the cost line for short-term holders. Bitfinex estimated in its report on November 4 that this level is around $75,800. The current price of $73,970 is already below this line—this means that recent buyers are generally sitting on losses.
The significance of this is not just "losing money," but they will sell during a rebound. Therefore, this line does not provide support; instead, it creates pressure.
Second, ETF capital flows. U.S. spot Bitcoin ETFs saw net outflows of $399 million and $116 million on November 2 and 3 respectively, a brief net inflow of $74.6 million on November 4, but by the morning of November 6, the cumulative net outflow reached $325 million.
ETFs are the primary source of incremental capital in this round. Their direction is not a "reference indicator," but "the money itself." When sources of incremental funds stop flowing in, any price support must rely on existing capital— and that is limited.
Third, macro data. The October non-farm payrolls released on November 6 and the October CPI announced on November 10. These two data points determine "how long high interest rates will last," and high interest rates are the underlying cause of this round of sell-offs.
Fourth, and I believe the most critical— the next batch of earnings reports from AI companies. What the market seeks now is not "whether AI has a future," but "when this investment will turn into profit." Without the earnings reports providing answers, all rebounds lack foundation.
7. My Views
I connect this round of decline with the earlier article from October.
On October 21, before the midterm elections, I wrote "Where to Invest in the Three Months Post Midterm Elections," predicting that the three months after the elections would be a differentiation window, not a rising window; the U.S. stock market would only repair without a major surge; gold would be the beneficiary; and Bitcoin should prepare for the worst-case scenario.
Six trading days later, all four points aligned.
But I do not intend to write this as "I was right." The value of verifying a judgment lies not in proving oneself correct, but in using this verification to rectify the conditions for the next time.
So I say four points that are now evident:
First, what is falling is not the stock market, but the narrative.
The shift from "AI will definitely make money" to "it needs to prove it can make money" is more important than any decline. Once the narrative is questioned, the valuation logic must be recalculated. And this recalculation process will not end in a day—because it needs to wait for earnings reports, and the reports take two quarters.
Second, policy uncertainty is now the primary pricing factor.
Before the elections, the fear was about not knowing who would win; after the elections, the fear changed to what actions would be taken post-victory. The uncertainty of the latter is actually higher since it is specific to terms and execution timelines.
And the variable of AI regulation is precisely what the market is least willing to see—it can alter the timeline of the industry without changing its trends.
Third, while crypto is relatively resilient, don’t celebrate too soon.
Being relatively resilient only indicates that the cause of this decline is not within crypto itself, not that crypto can enter an independent market. If global risk preferences continue to contract, crypto will eventually be dragged down as well, just possibly with a lag.
Fourth, this round of repricing is not yet over, but will unfold in a rhythmic manner.
It is not a single collapse, but a repeated "drop—rebound—drop again." The real risk is not how much further it drops, but being repeatedly consumed within the rhythm—each rebound is thought to be the bottom, yet every time it is proven not to be.
The downward direction is not finished yet. The basis for this judgment is not price points, but that the logic of repricing still cannot be overturned before the earnings reports come out.
8. Risk Warning
This article is a market analysis and technical structure discussion, not investment advice, nor a solicitation or recommendation, and does not guarantee any returns.
The market data within this article is from intraday data on November 9, 2026, and no technical analysis can predict prices; past performance does not represent future results.
The market carries extremely high risks, and leveraged trading may result in the loss of all principal. Please judge independently and assume all consequences of your decisions.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到[email protected]，本平台相关工作人员将会进行核查。
