The cryptocurrency selloff followed US midterm elections that strengthened Democratic control of Congress, raising concerns about potentially stricter digital asset regulations.
According to Reuters, investors worried that a Democratic-controlled Congress could introduce tougher oversight, potentially complicating cryptocurrency market structure legislation.
The reported USD 6 billion Binance security breach further weakened investor confidence, although its details require independent verification.
Political uncertainty added pressure to an already fragile market, encouraging traders to reduce exposure to speculative assets.
