Why is bitcoin falling?

The tech selloff is the main trigger today

Bitcoin fell from $78,767 to $75,986 within an hour after a selloff in chip stocks pushed the Nasdaq down almost 4%. The SOX semiconductor index, which tracks the biggest chipmakers, lost more than 9%. Bitcoin and tech stocks have moved in lockstep for years because they both attract the same kind of investor, one who is willing to take risk when confidence is high and pulls money out fast when it isn't. When chip stocks fall that hard, crypto follows.

Bitcoin's drop triggered a wave of leveraged position liquidations, with $451 million in positions wiped out in a single hour, the vast majority of them long positions, meaning traders who had borrowed money betting the price would rise instead got forced out at a loss. That selling feeds on itself: each liquidation pushes the price down a little further, which forces the next batch out.

The Binance hack is still weighing on confidence

On October 29, $6.3 billion worth of digital currency was stolen from Binance, the world's largest crypto exchange, allegedly by the North Korea-linked hacking group TraderTraitor. It is the largest cryptocurrency heist ever, surpassing the $1.5 billion Bybit hack in 2025.

Binance, working with other exchanges and partners, managed to freeze about $3 billion of the stolen funds. The exchange has said it replaced nearly 100% of what customers lost, using its own crypto holdings or buying in the markets to make them whole. Even so, spot Bitcoin ETFs (exchange-traded funds that hold actual bitcoin and trade on a stock exchange) recorded $398.6 million in outflows on November 2, following $643.3 million on October 30, showing that institutional money has been moving out since the hack landed.

The regulatory picture just got darker

Crypto markets had been pricing in the hope that the US would finally pass a clear rulebook for digital assets. That hope took a serious blow.

The CLARITY Act, officially the Digital Asset Market Clarity Act, was designed to establish rules of the road for the crypto sector for the first time in the US. It failed to get the 60 votes needed to advance in the Senate, losing a procedural vote 49 to 50, far short of the threshold required to open debate.

The drop is also being driven by worries that a Democratic-controlled Congress could impose stricter scrutiny on the artificial intelligence sector, which matters for crypto because the same investors who poured money into AI infrastructure have been the biggest buyers of bitcoin.

What to watch next

Bitcoin broke under $79,000 after losing its $79,800 support level, and tonight's close and Friday's jobs report will test whether the next floor at $77,846 holds. A jobs report is the monthly US government count of how many people got hired or fired, and it moves markets because it tells investors whether the Federal Reserve is likely to raise or cut interest rates, which in turn affects how much risk investors are willing to take on.

None of this means bitcoin is finished. It has recovered from bigger falls. But right now three separate pressures are pushing in the same direction at the same time, and that is why the drop feels sharper than the percentage alone suggests.