Ethereum Price Forecast: How is the AI sell-off hitting crypto as ETH drops 7%?

Ethereum today: Where does the price stand at $2,230?

• All of Ethereum's post-midterm election gains disappear as the token slides 7% towards $2,230.
• Regulatory worries following the Democrats' takeover of Congress weighed on the leading altcoin, which fell in tandem with the wider crypto market and AI-linked shares.
• Failure to regain $2,251 could leave ETH facing a test of support at $2,204.

Selling pressure spreads from AI stocks to cryptocurrencies on Thursday, sending Ethereum (ETH) down 7% to $2,230.

With the leading altcoin surrendering its entire Wednesday rally following the US midterm elections, ETH liquidations reached $181.8 million over the past 24 hours. Coinglass data show that long positions accounted for the bulk of these liquidations, at $149.7 million.

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

How traditional investors are reacting will become clearer from US spot ETH exchange-traded fund (ETF) flows after the market close. According to SoSoValue data, these products attracted net inflows of $53 million on Wednesday, marking their first positive session since inflows of $4.33 million on October 23.

What is driving the joint slide in crypto and equities?

A steep sell-off across cryptocurrencies and technology shares forms the backdrop to Ethereum's retreat. Across the market, crypto capitalisation fell 5%, setting off nearly $1.18 billion in futures liquidations during the past 24 hours.

A heavy sell-off in US equities preceded the crypto decline. While the S&P 500 lost 4%, the technology-heavy Nasdaq Composite (NASDAQ) shed 5%. AI-linked stocks bore the brunt of the selling: the Semiconductor Index (SOX) slumped 10%, putting it on course for its worst session since the March 2020 Covid-19 crash.

Traders may be opting to stay on the sidelines because of a lack of clarity on crypto and AI regulations following the Democrats' capture of both chambers of Congress in Tuesday's US midterm elections.

Ethereum technical outlook: Can ETH hold $2,251 support on a retest?

Recovery attempts face a hurdle from the 20-, 50- and 100-day Exponential Moving Averages (EMAs), grouped at roughly $2,345 to $2,405, after ETH slipped below them on the daily chart. A Relative Strength Index (RSI) reading of 40, alongside a Stochastic reading near 28, signals that bearish momentum has regained the upper hand.

Any move higher first encounters a narrow resistance zone comprising the 100- and 20-day EMAs around $2,344-$2,348 and the adjacent horizontal level at $2,355. Beyond this cluster lies the 50-day EMA at $2,405, followed by more formidable barriers at $2,548, $2,637, $2,782 and $3,076.

The nearest downside support lies at $2,251, with further floors at $2,205 and $2,107. Should sellers gather momentum again, a sharper 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.)