Bitcoin and ether slid to their lowest levels in more than two months in late Sunday trade, as investors worried that a Democratic Party-controlled US Congress will tighten regulation of digital assets.

Bitcoin, the largest cryptocurrency by market value, fell by more than 2 percent to $73,708, its lowest price since August, according to Reuters. Ether dropped about 5 percent to $2,223, also its weakest level since August.

The falls came as the US midterm election results sank in. The Democratic Party won control of both chambers of Congress, and crypto traders are now pricing in a harder policy road for the industry, with the prospect of stricter rules on exchanges, stablecoins and the wider market.

Heist and election results shake confidence

Crypto markets have been unsettled in recent sessions by two separate shocks. A reported $6 billion heist at Binance, the world's largest exchange, has raised fresh questions about security across the sector, while the election of high-profile critics of the industry in last week's midterms has added to the regulatory gloom.

The combination has hit prices hard. Bitcoin had traded around $76,000 as recently as 6 November, before the latest leg lower took it below $74,000. Ether has fallen further in percentage terms, losing about 5 percent in the Sunday session alone.

Regulation fears replace rate-cut hopes

Only weeks ago, crypto traders were focused on the prospect of easier monetary policy and further gains. The mood has now flipped. With a Democratic Congress expected to take a tougher line, the industry's hopes of lighter-touch legislation have faded, and traders are reassessing how much risk to carry into the end of the year.

Market watchers will now look to the week's US economic data for direction. October consumer price figures are due on Tuesday and producer prices on Friday, and both will shape expectations for the Federal Reserve's December meeting, where traders currently see a high chance of another interest rate rise.

For now, the slide leaves the two largest cryptocurrencies at their weakest levels since the summer, and the market's next move is likely to depend on whether the regulatory fears that drove Sunday's selling ease or deepen in the days ahead.

Altcoins fall further than bitcoin

Smaller tokens fell harder than bitcoin in the Sunday session, a familiar pattern when risk appetite fades. Traders often sell the most volatile assets first, and ether's steeper drop reflects its greater sensitivity to shifts in sentiment and to expectations about regulation of decentralised finance and staking services.

The declines also follow a week in which equity markets were already under pressure. The Nasdaq Composite fell 3.4 percent last week and the S&P 500 lost 2.7 percent, as investors questioned the scale of spending on AI infrastructure and braced for a Democratic Congress to scrutinise big technology companies more closely. Crypto, which trades around the clock, carried that caution into the weekend while stock markets were closed.

Whether the two-month lows mark a bottom or the start of a deeper correction is not yet clear. What is clear is that the twin supports that lifted crypto earlier this year — hopes of friendlier regulation and of easier monetary policy — have both weakened in the space of a week.