For about 24 hours, the market had something to celebrate.
Fresh off a Democratic sweep of the midterms, Wall Street rallied hard on Wednesday.&nbsp;
The Dow Jones Industrial Average posted its <a href="https://www.cnbc.com/2026/11/04/stock-market-today-live-updates.html" rel="noopener noreferrer nofollow">biggest gain</a> since April 2025, according to CNBC. Bitcoin (BTC) <a href="https://www.thestreet.com/crypto/markets/bitcoin-xrp-crypto-stocks-surge-after-gop-loses-midterm-2026" rel="noopener noreferrer nofollow">jumped </a>back above $80,000.
By Thursday afternoon, the party was over, and one crypto trader was having a very bad day.
<a href="https://www.thestreet.com/crypto/markets/bitcoin-stocks-crash-as-markets-erase-post-election-rally" rel="noopener noreferrer nofollow">Related: Bitcoin, stocks crash in steepest selloff since Liberation Day</a>
<h2 id="wall-street-reverses-as-bitcoin-traders-face-liquidations">Wall Street reverses as Bitcoin traders face liquidations</h2>
On Nov. 5, the Nasdaq Composite <a href="https://www.cnbc.com/2026/11/04/stock-market-today-live-updates.html" rel="noopener noreferrer nofollow">fell 3.9%</a>, while the Dow shed more than 1,150 points as concerns over artificial intelligence spending rattled Wall Street.
Bitcoin followed, dropping <a href="https://bitcoinmagazine.com/markets/bitcoin-price-drops-below-77000-tech" rel="noopener noreferrer nofollow">toward $76,000</a> and wiping out Wednesday's gains.
Crypto stocks also tumbled. Strategy (MSTR) fell <a href="https://stockanalysis.com/stocks/MSTR/" rel="noopener noreferrer nofollow">10.6%</a>, Coinbase (COIN) lost <a href="https://stockanalysis.com/stocks/COIN/" rel="noopener noreferrer nofollow">10.1%</a>, and Robinhood (HOOD) dropped <a href="https://www.google.com/finance/quote/HOOD:NASDAQ" rel="noopener noreferrer nofollow">10.4%</a> as of about 1 p.m. EST Thursday.
<a href="https://www.thestreet.com/crypto/markets/vivek-ramaswamys-strive-slips-62-places-on-roundtable-100" rel="noopener noreferrer nofollow">Related: Vivek Ramaswamy’s Strive slips 62 places on Roundtable 100</a>
The selloff came amid concerns that the incoming Democratic-controlled Congress could delay crypto-friendly legislation.
The CLARITY Act, which aims to establish clearer rules for digital assets, already <a href="https://www.fxstreet.com/cryptocurrencies/news/us-democrats-plan-new-crypto-market-structure-bill-after-midterm-wins-202611050303" rel="noopener noreferrer nofollow">failed a 49-50 Senate vote</a> in September, while Republicans controlled the chamber.
<a href="https://www.coindesk.com/policy/2026/11/04/u-s-democratic-sweep-could-be-the-final-nail-in-the-clarity-act-s-coffin" rel="noopener noreferrer nofollow">Analysts have warned</a> that Democratic control of Congress could further complicate its passage, although <a href="https://decrypt.co/382612/bitcoin-erases-election-rally-ai-stocks-plunge-428-million-crypto-longs" rel="noopener noreferrer nofollow">broader technology-stock weakness</a> also contributed to Thursday's decline.
<h2 id="leveraged-crypto-trader-suffers-heavy-loss">Leveraged crypto trader suffers heavy loss</h2>
According to a Nov. 5 <a href="https://x.com/lookonchain/status/2118378830939451728" rel="noopener noreferrer nofollow">Lookonchain post</a>, one trader was liquidated eight times, losing positions totaling 201 BTC, worth approximately $15.6 million.
Liquidation happens when an exchange forcibly closes a leveraged position because the trader no longer has enough collateral to maintain it.
<a href="https://hyperbot.network/trader/0x4b62652d2f176bf5422c8157c5b37984837d57ca" rel="noopener noreferrer nofollow">Data from Hyperbot</a> showed seven partial liquidations totaling approximately 158 BTC, with around $220,000 in realized losses.
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 Source: LookOnChain&nbsp;
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The trader then switched positions, opening a leveraged short against the Official Trump (TRUMP) memecoin, effectively betting on further price declines.
The token had already <a href="https://www.thestreet.com/crypto/markets/democrats-sweep-sends-trump-linked-assets-reeling" rel="noopener noreferrer nofollow">plunged on Nov. 4</a> following the Democratic election sweep.
At the time of reporting, TRUMP traded near <a href="https://www.coingecko.com/en/coins/official-trump" rel="noopener noreferrer nofollow">$1.17, down about 18%</a> over 24 hours, according to CoinGecko data as of 11:49 p.m. IST.
The trader's short position used 10x cross-margin leverage, meaning borrowed exposure amplified both potential gains and losses while drawing on available account collateral.
The broader market showed similar stress.
<a href="https://www.coinglass.com/liquidations" rel="noopener noreferrer nofollow">According to CoinGlass</a>, more than 207,000 traders faced approximately $1.06 billion in liquidations across crypto exchanges over 24 hours.

Trader suffers eight liquidations as panic selling grips markets

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