In the early hours of November 15, the price of Bitcoin fell to $62,199, a drop of 8.9% in 24 hours and a cumulative decline of 16.3% over the week.

This is the lowest price for Bitcoin since July 2026, representing a decline of over 50% from its historical peak.

Fear is spreading throughout the market: the Crypto Fear and Greed Index has dropped to 17, entering the "extreme fear" zone; over the past 24 hours, the total liquidation amount across the network exceeded $1 billion, with long positions making up nearly 90%; the total market capitalization has shrunk from nearly $30 trillion at the October peak to $23 trillion.

However, there is no single catalyst to explain this drop—it is the result of four pressures overlapping and resonating within the same timeframe. The significant decline in AI stocks has become an important transmission line threading through these pressures.

The results of the U.S. midterm elections on November 4 showed the Democratic Party sweeping both the Senate and House of Representatives. On the day the news was confirmed, Bitcoin briefly fell below $76,000.

The core concern in the market is that the probability of the previously regarded "set in stone" CLARITY Act (the cryptocurrency market structure bill) passing has significantly plummeted. The Democratic Party has historically advocated for stricter anti-money laundering and risk management regulations, and the shift in industry policy expectations directly removes an important cornerstone that has supported cryptocurrency valuations over the past two years.

But the impact of political changes is not limited to cryptocurrency regulation. The market is simultaneously beginning to reassess the policy risks faced by AI data centers in terms of environmental assessments, computing power electricity use, and safety regulations, expressing concerns about rising costs of data center construction and prolonged approval processes. Thus, the same election results have weakened the policy expectations for the cryptocurrency industry while shaking the narrative of continued rapid expansion of AI capital expenditure, ultimately evolving into a revaluation of risk assets across markets.

If politics is a slow-moving variable, the macroeconomic environment is a trigger. Data released in mid-November showed that U.S. inflation rose 0.4% month-on-month in October, exceeding the expected 0.3%; the monthly increase in non-farm employment was 165,000, nearly 2.5 times market expectations (around 65,000).

Federal Reserve Board member Christopher Waller then publicly stated the prediction that the Fed would raise interest rates by 50 basis points. CME FedWatch data indicated that the market pricing for a 25 basis point rate hike in December has reached 88.5%, with pricing for a larger hike at 11.5%.

Note that this is not about "slowing down the rate of interest rate cuts," but a directional reversal—from expecting rate cuts to repricing for rate hikes. Higher interest rates directly increase the cost of holding leveraged positions and significantly reduce the relative attractiveness of zero-yield risk assets such as Bitcoin.

The same interest rate transmission chain also suppresses AI stocks: the valuations of AI companies are highly dependent on future growth, while data centers, chips, and power infrastructure require continuous substantial capital investment. When discount rates and financing costs rise in tandem, the market naturally scrutinizes more harshly when AI investments might translate into profits and cash flow.

Thus, AI stocks and Bitcoin are not two unrelated markets, but are facing the same question together: in a high-interest-rate environment, how much should assets that rely on future narratives and liquidity support be worth?

Deeper signals come from stablecoins. Data from Coinbase Institutional indicates that the total circulating supply of the three major stablecoins, USDT, USDC, and DAI, shrank by $11.5 billion over the past 30 days, setting a historical record.

This stands in stark contrast to the environment in 2025 when "new companies were announcing Bitcoin purchases every week." The situation for Strategy makes this backlash even more dramatic: just a week before the crash, MSCI had announced its removal from the global standard index (effective November 30), leaving expectations of a cut-off from passive funding pipelines unresolved; its average holding cost of $75,456 is already above the current market price.

From an on-chain structure perspective, this downturn is similar to the liquidation wave on October 10, 2025 (both being concentrated clear-outs of leveraged longs), but the context is entirely different. Glassnode data shows that Bitcoin has dropped below the average cost line of short-term holders (STH) at about $75,700, meaning the vast majority of buyers in the past year are currently in a state of unrealized losses.

At the same time, the correlation between Bitcoin and Nasdaq growth technology stocks has significantly increased—the Nasdaq entered a technical correction range at the beginning of November (down over 10% from its peak), and market skepticism about the return on AI capital expenditure is transmitting to the cryptocurrency market through "risk asset resonance."

This brings a pessimistic conclusion: as long as the Federal Reserve's rate hike in December takes effect and the adjustment in the U.S. tech sector does not stop, external pressure on the cryptocurrency market is unlikely to ease; while the fear index at 17 has already entered historical extremes, "extreme fear" itself has never been a bottom signal—experience from 2022 indicates that extreme sentiment can persist for months.

Next, three verification points to watch closely are: the interest rate decision and actual magnitude at the December FOMC meeting (25 basis points or 50 basis points); whether the weekly flow of spot ETFs can stop the bleeding; and whether the $60,000 integer threshold can hold up against liquidation shocks below the institutional cost line.

Another point of interest is whether the sell-off of AI stocks—especially Nvidia and the semiconductor sector—shows exhaustion signals, as well as whether the correlation between BTC and the Nasdaq begins to fall back from its high of 0.68. If the first three continue to deteriorate while de-leveraging in AI picks up speed, the definition of this round of "correction" may need to be rewritten.