Crypto Crash Alert: Altcoins Tumble 25% Ahead of US Midterms as Historical Election Patterns Point to More Downside

Why is the crypto market under pressure? Bitcoin has historically declined by as much as 51% after the previous three US midterm elections, while several major altcoins have already lost approximately 20% of their value ahead of this year’s vote.

The cryptocurrency market is facing another wave of selling as several negative catalysts emerge simultaneously. The aftermath of the $6.36 billion Binance hack, heavy withdrawals from exchange-traded funds and uncertainty surrounding the US midterm elections have combined to weaken market sentiment.

A chart posted on X by trader dealer.eth has drawn attention to Bitcoin’s historical behavior during previous midterm election cycles. According to the trader’s analysis, BTC experienced corrections ranging from 15% to 51% after each of the last three elections. The comparison has raised concerns that another significant decline could follow the current vote.

Bitcoin has maintained relative strength compared with most leading altcoins, although it remains firmly in negative territory. BTC is trading around $77,088, representing a 7.8% decline from its October 1 price. Several major alternative cryptocurrencies have suffered considerably deeper losses.

Solana has dropped 21.7% since October began, while Dogecoin has declined 21.3% and Cardano has lost 23.3%. Ethereum and XRP have each retreated by approximately 15%.

The total cryptocurrency market value currently stands at $2.58 trillion, accompanied by $67.9 billion in trading volume over the past 24 hours. The Fear & Greed Index has fallen to 26, indicating that investors remain firmly in fear territory.

With the US midterm elections underway, political uncertainty is adding to the challenges facing digital assets. Historical market data suggests Bitcoin could experience further weakness after the election, although previous cycles cannot reliably predict future price movements.

So, what is behind the latest downturn, and which cryptocurrencies are bearing the brunt of the sell-off?

Four Major Factors Behind the Latest Crypto Decline

The current market weakness stems from four developments that are putting pressure on investor confidence and reducing demand for digital assets.

Binance exploit creates fresh security concerns

The October 29 Binance breach resulted in approximately $6.36 billion in stolen cryptocurrency. Blockchain analytics company Elliptic estimates that roughly $3.24 billion remains in addresses associated with the attackers, with Bitcoin and Ethereum representing most of the holdings. Any significant transfer of these assets could raise concerns about potential selling activity.

ETF withdrawals weaken institutional demand

Investment flows have also turned increasingly negative. US spot Bitcoin ETFs recorded $643.3 million in outflows on Friday, followed by another $398.6 million on Monday. Ethereum investment funds experienced an additional $140 million in withdrawals on Monday, marking their sixth consecutive session of outflows.

Midterm elections threaten to delay crypto legislation

The US political landscape is creating another source of uncertainty. Democrats are favored to gain control of the House and could also secure the Senate. This outcome could complicate legislative negotiations and postpone progress on cryptocurrency-related bills for at least two years.

Oil prices and Fed expectations pressure risk assets

Brent crude has climbed beyond $100 following another US military strike against Iran. Meanwhile, interest rate futures indicate that traders are increasingly considering a Federal Reserve rate hike in December. Higher oil prices and tighter monetary policy expectations could discourage investors from holding volatile assets.

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

Bitcoin’s Performance After the Previous Three Midterm Elections

Bitcoin’s price history reveals that the cryptocurrency experienced substantial declines following each of the last three US midterm elections before eventually establishing its bear market bottom.

Trader dealer.eth has compared those historical corrections with Bitcoin’s current valuation to illustrate the potential downside if a similar pattern develops again.

• 2014: BTC declined 48% over 71 days, corresponding to an estimated price of $40,500.
• 2018: Bitcoin plunged 51% in 39 days, suggesting a comparable valuation of approximately $38,400.
• 2022: The cryptocurrency lost 15% over 13 days, translating to around $66,300.

Each of these declines eventually marked the lowest point of its respective bear market. Bitcoin subsequently delivered gains of 24%, 45% and 92% during the following 12 months.

Nevertheless, the historical comparison has limitations. Each election occurred during an established bear market, and the 2022 correction coincided with the FTX collapse. These examples highlight a possible recurring trend but do not establish that another similar decline is inevitable.

Which Major Altcoins Are Suffering the Biggest Losses?

Ethereum is trading near $2,272, down 15.4% since October 1. ETH has demonstrated slightly better resilience than Bitcoin following the Binance hack, declining 2.8% compared with BTC’s 4.7% loss. However, persistent ETF withdrawals continue to weigh on its price.

XRP is changing hands around $1.256, representing a 15.7% monthly decline. Despite the broader weakness, it is the only cryptocurrency among the top five recording a positive 24-hour performance, with a gain of 0.6%.

BNB has slipped to approximately $698, declining 9.2% over the month and 6.2% since the Binance security breach.

Solana has recorded a much steeper correction, falling 21.7% to around $92.52. This makes SOL the weakest performer among the six largest cryptocurrencies.

Dogecoin has also struggled, losing 21.3% and trading near $0.0744.

The losses are even greater across several other altcoins. Sui has declined 24.7%, Chainlink has fallen 22.6%, and Avalanche has dropped 22.3% since October 1.

Hyperliquid’s HYPE token maintained relative stability throughout much of October but has since declined 10.3% following the Binance incident. This is the largest loss among major cryptocurrencies over that specific period.

TRON remains one of the few relatively stable assets, with a monthly decline of only 4.2%. TRX has also advanced 2.2% over the past 24 hours.

Solana’s technical structure provides another indication of the pressure facing the altcoin market. SOL has broken below its 200-day exponential moving average, currently positioned at $98.11, and is trading near $92. The next significant support level is around $83.50, roughly 10% below its current price.

Meanwhile, Bitcoin dominance has climbed to 59.9% of the overall cryptocurrency market. This suggests that investors are increasingly favoring BTC over alternative cryptocurrencies as they reduce exposure to higher-risk assets.

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What Could Trigger a Recovery in the Crypto Market?

Three developments could play an important role in determining whether cryptocurrency prices stabilize or experience another round of selling.

US midterm election outcome: The first polling stations are scheduled to close at 7 p.m. ET (00:00 UTC). A decisive result could reduce political uncertainty and provide investors with a clearer understanding of the future regulatory environment.

ETF flows turn positive: Renewed inflows into spot Bitcoin and Ethereum ETFs could indicate that institutional investors are returning. Stronger demand from these products may help absorb some of the ongoing selling pressure.

Stolen Binance funds remain inactive: Around $3.24 billion in stolen cryptocurrency reportedly remains in wallets linked to the attackers. If these holdings remain untouched or authorities manage to freeze additional assets, concerns about a sudden market dump could diminish.

For now, the cryptocurrency market is dealing with several overlapping risks. The Binance exploit, institutional withdrawals, election uncertainty and unfavorable macroeconomic conditions are collectively weighing on investor sentiment.

Until buyers return with stronger demand, Bitcoin and altcoins could remain vulnerable to additional losses. Although historical midterm election data highlights the possibility of further volatility, the market’s next direction will ultimately depend on institutional flows, liquidity conditions and the resolution of current risks.