Why is the crypto market declining? Bitcoin has historically recorded losses of up to 51% following the previous three US midterm elections, while major altcoins have already shed as much as 20% ahead of this year’s vote.

Cryptocurrency prices are facing renewed downward pressure as multiple negative developments hit the market simultaneously. The massive Binance security breach, substantial withdrawals from spot ETFs and uncertainty surrounding the US midterm elections have further weakened investor confidence.

A chart shared by trader dealer.eth on X has attracted attention by highlighting Bitcoin’s historical performance after midterm elections. The data shows that BTC declined between 15% and 51% following each of the previous three elections. This has raised concerns that another significant correction could emerge after Americans cast their votes.

Bitcoin has demonstrated greater resilience than most major altcoins, but it has not escaped the broader market downturn. BTC is trading near $77,088, down 7.8% from its October 1 level. Several leading alternative cryptocurrencies have experienced losses considerably larger than Bitcoin’s.

Solana has declined 21.7% since the start of October, while Dogecoin has dropped 21.3% and Cardano has fallen 23.3%. Ethereum and XRP have both recorded approximately 15% losses.

The overall cryptocurrency market capitalization has slipped to $2.58 trillion, with trading volume reaching $67.9 billion over the past 24 hours. The Crypto Fear & Greed Index stands at 26, reflecting a market environment dominated by fear.

The approaching US midterm elections have added another source of uncertainty. Historical data suggests Bitcoin could experience additional volatility following the vote, although previous market movements do not necessarily indicate what will happen next.

What is triggering the latest crypto sell-off, and which digital assets are showing the weakest performance?

Why Is the Crypto Market Experiencing Another Sell-Off?

Four significant developments are combining to put pressure on cryptocurrency prices. Together, they have encouraged investors to reduce risk rather than increase their exposure to digital assets.

Binance hack raises selling concerns

The October 29 security incident resulted in approximately $6.36 billion in stolen cryptocurrency. According to Elliptic, around $3.24 billion remains in wallets connected to the attackers, with most of the holdings consisting of Bitcoin and Ethereum. Any movement of these assets could trigger fresh concerns about potential market liquidations.

Bitcoin and Ethereum ETFs continue losing capital

Institutional investment flows have turned negative. US spot Bitcoin ETFs recorded $643.3 million in withdrawals on Friday, followed by another $398.6 million on Monday. Ether ETFs also experienced $140 million in outflows on Monday, extending their negative streak to six consecutive sessions.

Midterm elections create regulatory uncertainty

The political outlook is another factor influencing investor sentiment. Democrats are expected to take control of the House and could potentially secure the Senate. Such a shift could complicate legislative negotiations and delay the advancement of cryptocurrency-related bills in Congress for at least two years.

Oil prices and interest rate expectations increase pressure

Brent crude has moved above $100 following another US strike on Iran. Meanwhile, interest rate futures traders are increasingly anticipating a possible Federal Reserve rate hike in December. Rising energy costs and tighter monetary policy expectations could make riskier investments less attractive.

DISCOVER: North Korea Calls Binance Hack Allegations “Absurd” and Points to the US as $3.24 Billion in Stolen Crypto Remains Unlaundered

Does Bitcoin Usually Fall After US Midterm Elections?

Bitcoin’s performance following the previous three US midterm elections reveals a recurring pattern of post-election corrections.

Trader dealer.eth examined these historical declines and applied their percentages to Bitcoin’s current valuation to estimate how similar movements could affect the market today.

• 2014: Bitcoin lost 48% over 71 days. A comparable decline would place BTC near $40,500.
• 2018: The cryptocurrency plunged 51% within 39 days, implying a potential price around $38,400.
• 2022: BTC declined 15% over 13 days, which would translate to approximately $66,300 at current levels.

Interestingly, each historical decline eventually established the bottom of its respective bear market. Bitcoin then recovered, gaining 24%, 45% and 92% over the following year.

However, the circumstances surrounding those elections were different. All three periods occurred during established bear markets, while the 2022 correction coincided with the collapse of FTX.

Therefore, the historical figures offer a useful reference for investors but should not be interpreted as a guarantee that Bitcoin will experience another comparable decline.

Which Cryptocurrencies Are Losing the Most Value?

Ethereum is trading around $2,272, down 15.4% since October 1. Following the Binance hack, ETH has lost 2.8%, compared with Bitcoin’s 4.7% decline. Despite this relative strength, continued withdrawals from Ether ETFs are limiting recovery prospects.

XRP is currently valued at approximately $1.256, representing a 15.7% monthly decline. It is the only cryptocurrency among the top five to register a positive 24-hour return, gaining 0.6%.

BNB has fallen to approximately $698, down 9.2% since the beginning of October and 6.2% since the Binance security incident.

Solana has experienced one of the steepest corrections among large-cap cryptocurrencies. SOL is trading near $92.52 after losing 21.7% over the month, making it the weakest performer among the six largest digital assets.

Dogecoin has also faced considerable selling pressure, declining 21.3% to approximately $0.0744.

Several mid-cap cryptocurrencies have suffered even greater losses. Sui has dropped 24.7%, Chainlink has declined 22.6%, and Avalanche has fallen 22.3% since October 1.

Hyperliquid’s HYPE token remained relatively stable during much of October but has declined 10.3% since the Binance hack. Among major cryptocurrencies, this represents the largest loss over that specific period.

TRON has been comparatively resilient, falling just 4.2% during October while recording a 2.2% gain over the latest 24-hour period.

Solana’s technical indicators also point to continued weakness. SOL has moved below its 200-day exponential moving average at $98.11 and is trading around $92. The next notable support level is near $83.50, approximately 10% below its current valuation.

Bitcoin is also strengthening its position relative to the broader market. Its dominance has climbed to 59.9% of total cryptocurrency capitalization, suggesting traders are shifting capital away from altcoins and toward the largest digital asset during this period of uncertainty.

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What Could Help Bitcoin and Altcoins Recover?

Three important developments could determine whether the cryptocurrency market finds support or continues moving lower.

Election results: The first US polling stations are expected to close at 7 p.m. ET (00:00 UTC). A clear result could reduce political uncertainty and help investors understand the potential direction of cryptocurrency legislation.

ETF investment activity: A return to positive inflows into Bitcoin and Ethereum funds could signal renewed institutional interest. Stronger demand from large investors may help offset ongoing selling pressure.

Movement of stolen cryptocurrency: Approximately $3.24 billion in stolen assets remains in wallets associated with the Binance attackers. If these funds remain inactive or additional holdings are frozen, concerns about a sudden wave of selling could gradually ease.

For now, several bearish developments are affecting the market simultaneously. Security concerns, institutional withdrawals, political uncertainty and macroeconomic pressures are keeping investors cautious.

Until stronger buying demand emerges, Bitcoin and altcoins may remain exposed to additional volatility. Although previous midterm elections provide a historical warning, the next major market move will depend on how these current developments unfold.