The cryptocurrency market has swiftly reversed the gains seen yesterday.
Bitcoin has plummeted to approximately $77,500, experiencing a decline of about 3.5% within the last 24 hours. Ethereum traded around $2,316, losing nearly 5%. XRP has retreated to $1.27, and Solana saw a drop of about 4%.
The downturn is widespread. Zcash, BNB, and Hyperliquid have also experienced declines, erasing a significant portion of the gains observed during Wednesday’s post-election surge.
The primary trigger for this sell-off seems to be unexpectedly robust labor market data from the U.S.
New U.S. Jobless Claims Drop to a 57-Year Low
Initial claims for unemployment benefits fell to just 189,000 for the week ending October 31.
This figure is lower than the market expectations of approximately 195,000-197,000 and marks the lowest level since 1969. The prior week’s claims were adjusted to 195,000.
Usually, a decrease in unemployment claims is viewed as positive economic news.
However, in the context of cryptocurrency, the response can be quite different.
A stronger labor market suggests to the Federal Reserve that there is less urgency to implement looser monetary policies. With inflation rates still above acceptable levels, markets were already factoring in a high likelihood of another interest rate hike in December.
BREAKING: Bitcoin dropped below $77,000 and Ethereum fell below $2,300 as $370 million worth of leveraged positions were liquidated in just 60 minutes. https://t.co/vYsLLjWKcL
— The Kobeissi Letter (@KobeissiLetter) November 5, 2026
Thus, solid employment figures can lead to expectations of tighter financial conditions persisting longer.
In such circumstances, Bitcoin, Ethereum, and other speculative assets often face challenges.
This is More Than Just a Crypto Drop
This reaction is evident beyond the crypto space as well.
Tech stocks are experiencing significant pressure today, with the Nasdaq falling around 2.4% and the S&P 500 down about 1.2%. Nvidia saw a decline of more than 4%, AMD dropped over 10%, and several AI-related stocks suffered even greater losses.
This is noteworthy.
The simultaneous decline in Bitcoin, altcoins, and high-growth technology stocks indicates that this downturn resembles a broader macro risk-off event rather than a crypto-specific problem.
The employment figures contribute to this phenomenon.
Investors are reevaluating the previously lofty valuations in AI and semiconductors after a strong performance, while rising interest rates continue to diminish the appeal of speculative assets.
Consequently, cryptocurrencies find themselves trapped in the same trend.
The Previous Day’s Rally Was More Unstable Than It Seemed
There’s an additional reason behind the rapid price declines.
Though yesterday’s surge past $80,000 seemed robust, underlying market metrics suggested otherwise.
The open interest in Bitcoin futures hardly increased during the rise, U.S. spot Bitcoin ETFs attracted merely around $74 million, and the Coinbase Premium remained in negative territory.
Reports indicate approximately $450 million in crypto short positions were liquidated over the last 24 hours, including around $300 million in Bitcoin shorts.
In essence, a substantial part of the recovery stemmed from traders closing bearish positions rather than a significant influx of new buying activity.
This distinction is crucial now.
As the macro landscape turned negative again, there wasn’t sufficient demand to keep Bitcoin comfortably above the $80,000 mark.
What Lies Ahead for Bitcoin and Crypto?
Bitcoin has now relinquished the $80,000 level that appeared promising just hours ago.
The key thresholds to monitor are approximately $76,000-$77,000.
Bitcoin recently established a local low near $75,700, making another test of that area significant in determining the strength of any recovery.
If $75,700 is broken, the rebound from earlier this week could appear merely as a temporary relief bounce.
A recovery back to $79,000 and subsequently $80,000 would signal that buyers are absorbing the selling pressure from today.
The forthcoming U.S. jobs report becomes even more crucial.
Weekly claims already indicated that layoffs remain exceptionally low. Another strong employment report could further exert pressure on rate-sensitive investments.
For the time being, the crypto market downturn seems less like a sudden industry crisis and more like a fragile recovery colliding with the reality that the U.S. economy might still be too robust to justify the looser monetary policies preferred by risk markets.
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