Leverage-Induced Sell-Offs Cause Simultaneous Decline in Stocks and Cryptocurrencies
On November 4, U.S. stocks started the day in the red, as all three major indices—the Dow Jones, S&P 500, and Nasdaq—fell amid a resurgence of investor wariness. The Dow slipped 0.68%, the S&P 500 lost 1.12%, and the Nasdaq dropped 1.58%. This collective downturn reflected broader weakness in crypto-related stocks, according to a
This weakness in traditional markets extended into the crypto sector, with Bitcoin falling below $104,000 and alternative coins such as
Early trading before the market opened had already indicated a downward trajectory, with crypto-related stocks like MicroStrategy (MSTR), Coinbase (COIN), and
Market anxiety was further heightened after top executives from leading investment banks like Goldman Sachs and Morgan Stanley issued warnings about possible declines in equities. Since early October, the crypto market correction has wiped out $1.2 trillion in value, driven by a 20:1 leverage ratio that led to widespread liquidations, as reported by CryptoFront News. Experts believe a rebound may occur once open interest falls below $30 billion and ETF inflows stabilize. For now, however, the ongoing interaction between traditional and digital assets continues to fuel uncertainty, leaving investors on edge for more volatility ahead.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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