Bitcoin's price fell roughly 5% on Thursday morning, sliding from above $80,800 to near $76,000 as a sharp selloff in technology stocks spilled into crypto markets and wiped out leveraged traders betting on further gains, according to Bitcoin Magazine Pro data.

The decline erased the rebound that had carried bitcoin back above $80,000 overnight. The asset touched a low near $76,100 shortly after the U.S. stock market opened, its weakest level since the start of the week.

The reversal came fast. Bitcoin held near $80,000 through Wednesday, and early Thursday traders were cheering a short squeeze — a rapid rally that forces traders betting on declines to buy back and close their positions — that pushed it past $80,500. Within roughly two hours of the opening bell, the bitcoin price was more than $4,000 lower.

Wall Street's AI trade breaks

The trigger sat on Wall Street. The Nasdaq Composite tumbled as much as 3.9% on Thursday and slipped into correction territory, trading 10% below the record close it set last month, CNBC reported. The S&P 500 fell about 2%, erasing Wednesday's rally, which had been its best session in three months.

Chip and AI stocks took the worst of it. Nvidia and Broadcom each fell about 5%, Tesla lost around 9%, and neocloud names CoreWeave, Nebius and IREN dropped between 9% and 13%. Qualcomm slid 9% after a weak outlook, while Sandisk was down nearly 19% at the time of writing.

Investors are pricing in a Democratic-controlled Congress after Tuesday's midterms. Traders fear new limits on the data center buildout, and UBS analysts estimated that around 30% of U.S. data center capacity additions expected in 2028 could be at risk from construction pauses, Reuters reported. The selling started in Asia, where South Korea's Kospi closed down more than 5% as Samsung and SK hynix sank.

U.S. stocks shed $2.3 trillion in market value within the first hour of trading, with the Russell 2000 plunging 2.5% and on pace for its biggest one-day drop since June 5.

Bitcoin price has traded alongside that AI-heavy tech complex for most of the year, and bitcoin miners are now part of it. Many have sold bitcoin to fund AI data centers, so the same political risk now weighs on both.

Leverage unwinds

Leverage turned the move into a flush. Roughly $370 million in leveraged crypto positions were liquidated — forcibly closed by exchanges once losses exhaust a trader's posted collateral — in about an hour as bitcoin broke $77,000 and ether fell below $2,300, most of them long bets. Wider tallies circulating on X put long liquidations closer to $400 million over the same 60 minutes.

The U.S. stock market shed more than $1 trillion in value within minutes of the open, and crypto went with it.

Wednesday's short squeeze had pulled in late buyers using borrowed money. When stocks broke, those positions were the first to go, and forced selling pushed the bitcoin price through support around $77,000.

Hot labor data cools rate-cut hopes

The macro backdrop offered little cover. Initial jobless claims, a weekly gauge of new applications for unemployment benefits, fell to 189,000 last week, matching July's level, which was the lowest since 1969, Reuters reported. Economists had expected 196,000.

A labor market that tight gives the Federal Reserve little reason to ease. That leaves risk assets leaning on growth stories like AI to carry them, and that story is now under political pressure.

Fund flows were only a small offset. U.S. spot bitcoin ETFs — funds traded on U.S. exchanges that hold bitcoin directly — took in a net $74.6 million on Wednesday, breaking a three-day run of outflows, led by Fidelity's FBTC, while BlackRock's IBIT saw money leave.

What comes next for bitcoin price

The next test is Friday's October jobs report, followed by October CPI on Nov. 10 and the Fed's Dec. 9 decision. Policy risk is building as well, with House Democrats drafting their own market structure bill ahead of taking over the committees in January.

Traders are watching whether bitcoin can hold the $75,000 area, which held as support on election night and several times since August. A break would leave the bitcoin price near its lowest levels in months.

At the time of writing, the bitcoin price is near $76,200.

This article first appeared on Bitcoin Magazine and is written by Micah Zimmerman.