Ethereum Price Forecast: AI Sell-Off Sends ETH Down 7% as Crypto Comes Under Pressure

Ethereum trades at $2,230 today

• A 7% fall towards $2,230 erases Ethereum's entire post-midterm election advance.
• Regulatory concerns following the Democrats' capture of Congress weighed on the leading altcoin, the wider crypto market and AI-related shares.
• Failure to regain $2,251 could leave ETH facing a test of support at $2,204.

A 7% decline takes Ethereum (ETH) to $2,230 on Thursday, as selling in AI shares spreads to the crypto market.

According to Coinglass data, ETH liquidations reached $181.8 million over the past 24 hours as the leading altcoin surrendered all of Wednesday's gains following the US midterm elections. Long positions accounted for the bulk of liquidations, at $149.7 million.

Exchange net deposits, by contrast, stood only slightly above 7,000 ETH. This suggests either lighter spot selling pressure on centralised crypto exchanges or investors buying the dip. Reluctance to transfer funds to exchanges may reflect caution following last week's Binance hack worth $6.3 billion.

Once markets close, flows into US spot ETH exchange-traded funds (ETF) will offer a gauge of traditional investors' response. SoSoValue data show that the funds attracted net inflows of $53 million on Wednesday, marking their first positive session since inflows of $4.33 million on 23 October.

Crypto market retreats in tandem with equities

A steep sell-off across cryptocurrencies and technology shares has dragged Ethereum lower. Total crypto market capitalisation fell 5%, setting off almost $1.18 billion in futures liquidations during the past 24 hours.

Heavy losses in US equities preceded the move, with the technology-focused Nasdaq Composite (NASDAQ) down 5% and the S&P 500 losing 4%. AI-related stocks drove the decline. A 10% fall in the Semiconductor Index (SOX) put it on course for its worst session since the Covid-19 crash in March 2020.

Traders may be stepping back against a backdrop of uncertainty surrounding crypto and AI regulation following the Democrats' victory in both chambers of Congress at Tuesday's US midterm elections.

Ethereum retests $2,251 support as ETH technical outlook weakens

Recovery attempts on ETH's daily chart face a barrier from the 20-, 50- and 100-day Exponential Moving Averages (EMAs), grouped at roughly $2,345 to $2,405, after the price slipped beneath them. With the Relative Strength Index (RSI) at 40 and the Stochastic near 28, momentum indicators point to renewed bearish dominance.

Any rebound would first encounter a narrow resistance zone comprising the 100- and 20-day EMAs around $2,344-$2,348 and the adjacent horizontal barrier at $2,355. Beyond that zone lies the 50-day EMA at $2,405, followed by more substantial obstacles at $2,548, $2,637, $2,782 and $3,076.

Initial downside support lies at $2,251, with further floors at $2,205 and $2,107. Should sellers gather momentum again, a deeper retreat could bring the lower support levels of $1,972 and $1,828 into play.

(The technical analysis of this story was written with the help of an AI tool. Know more.)