Why Is Crypto Falling? Altcoins Drop 25% in a Month as US Midterms Loom and Trader Warns of Further Losses

Why is the crypto market declining? Bitcoin has dropped between 15% and 51% following the previous three US midterm elections, while major altcoins have already fallen by around 20% ahead of this year’s vote.

The crypto market is under pressure as the Binance hack, two consecutive days of significant ETF outflows and the US midterm elections converge on an already fragile market. A chart shared on X by trader dealer.eth has attracted attention, showing that Bitcoin declined between 15% and 51% after each of the last three midterm elections. Could the same historical trend play out again?

Bitcoin remains the strongest performer among major cryptocurrencies, yet it has also suffered losses. BTC is trading at $77,088, down 7.8% from its October 1 price. Several leading altcoins have experienced declines two to three times greater.

Solana has fallen 21.7% since the beginning of October, Dogecoin is down 21.3%, and Cardano has lost 23.3%. Ether and XRP have each declined by approximately 15%.

The overall crypto market capitalization stands at $2.58 trillion, with $67.9 billion in trading volume over the past 24 hours. The Crypto Fear & Greed Index is at 26, indicating fear among market participants. The upcoming election introduces another layer of uncertainty, while dealer.eth’s historical data suggests post-midterm Bitcoin declines could be sharp and rapid.

What factors are driving the latest sell-off, and which cryptocurrencies are experiencing the steepest losses?

Why Is Crypto Down This Week?

Four major developments are weighing on digital assets simultaneously. Individually, each could pressure prices. Together, they are making investors hesitant to enter the market.

The Binance hack: Approximately $6.36 billion was stolen on October 29. Elliptic estimates that around $3.24 billion remains in wallets controlled by the attackers, primarily in BTC and ETH. Any movement of these funds could raise concerns about potential selling pressure.

ETF outflows: US spot Bitcoin ETFs recorded $643.3 million in outflows on Friday, followed by another $398.6 million on Monday. Ether investment funds experienced $140 million in withdrawals on Monday, marking their sixth consecutive day of outflows.

The US midterm elections: Democrats are expected to gain control of the House and may also secure the Senate. Such a political shift could delay crypto-related legislation in Congress for at least two years.

Oil prices and interest rates: Brent crude has climbed above $100 following another US strike on Iran. Meanwhile, futures traders are increasingly anticipating a Federal Reserve rate hike in December.

DISCOVER: North Korea Rejects Binance Hack Allegations as “Absurd” and Blames the US While $3.24 Billion in Stolen Crypto Remains Unlaundered

How Did Bitcoin Perform After the Previous Three Midterm Elections?

Bitcoin experienced significant declines after each of the last three US midterm elections before eventually establishing market bottoms. Dealer.eth’s chart adjusts the historical post-election drawdowns to Bitcoin’s current price level.

• 2014: BTC declined 48% over 71 days, implying a comparable price of approximately $40,500.
• 2018: Bitcoin dropped 51% within 39 days, translating to a potential price near $38,400.
• 2022: BTC fell 15% over 13 days, suggesting a comparable level around $66,300.

In all three instances, the post-election low ultimately marked the bear market bottom. Bitcoin subsequently gained 24%, 45% and 92%, respectively, during the year following each election.

However, all three periods occurred during established bear markets. The 2022 decline was also accompanied by the FTX collapse during the same week. Although these historical examples provide an interesting comparison, three occurrences are insufficient to establish a reliable prediction.

Which Major Cryptocurrencies Are Falling the Most?

Ethereum is trading at $2,272, down 15.4%. Since the Binance hack, ETH has declined less than Bitcoin, losing 2.8% compared with BTC’s 4.7% drop. However, persistent ETF selling continues to weigh on the asset.

XRP is priced at $1.256, down 15.7% since October 1. It is the only cryptocurrency among the top five to post a positive 24-hour performance, gaining 0.6%.

BNB is trading at $698, representing a 9.2% monthly decline and a 6.2% loss since the exchange hack.

Solana has fallen to $92.52, down 21.7% since October began, making it the worst-performing cryptocurrency among the top six.

Dogecoin is trading at $0.0744, down 21.3% over the same period.

Losses become even more pronounced further down the market rankings. Sui has declined 24.7%, Chainlink has dropped 22.6%, and Avalanche has lost 22.3% since October 1.

Hyperliquid’s HYPE token remained relatively resilient throughout October but has fallen 10.3% since the Binance hack, the largest decline among major cryptocurrencies during that period.

TRON is one of the few assets showing relative stability, down just 4.2% for the month while gaining 2.2% over the past 24 hours.

Solana’s technical structure highlights the extent of the market damage. SOL has fallen below its 200-day exponential moving average, currently positioned at $98.11, and is trading near $92. The next significant swing-low support sits around $83.50, approximately 10% below its current price.

Capital is increasingly concentrated in Bitcoin. BTC now accounts for 59.9% of the total crypto market capitalization. Bitcoin dominance typically rises during periods of market uncertainty as investors reduce exposure to riskier altcoins.

EXPLORE: Fed Meeting Today: Traders Expect a 95% Rate Hold and a 79% Chance of a December Hike. How Could Crypto React?

Why Is Crypto Falling, and What Could Trigger a Recovery?

Three key developments could influence the crypto market’s direction this week.

Midterm election results: The first polling stations are scheduled to close at 7 p.m. ET (00:00 UTC). A decisive outcome could remove some political uncertainty, regardless of which party gains control.

ETF investment flows: A return to positive daily inflows into Bitcoin and Ether ETFs could provide the first indication that institutional buyers are returning to the market.

Movement of the hackers’ funds: If the $3.24 billion in stolen cryptocurrency remains untouched or additional funds are frozen, concerns about an abrupt liquidation could gradually diminish.

For now, the explanation behind the crypto downturn is straightforward: several negative catalysts are converging, selling pressure remains elevated, and buyers have yet to provide enough demand to stabilize prices.

Why Is Crypto Falling? Altcoins Drop 25% in a Month as US Midterms Loom and Trader Warns of Further Losses

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