Ethereum Price Forecast: ETH falls 7% as AI sell-off hits crypto

Ethereum price today: $2,230

• Ethereum drops 7% toward $2,230, wiping out all its post-midterm election gains.
• The top altcoin declined alongside the broader crypto market and AI-related stocks amid regulatory concerns after Democrats gained control of Congress.
• ETH could test the $2,204 support level if it fails to reclaim $2,251.

Ethereum (ETH) falls 7% to $2,230 on Thursday as AI stock sell-offs spilled into the crypto market.

The top altcoin's decline wiped out all of Wednesday's post-US midterm gains, triggering $181.8 million in ETH liquidations over the past 24 hours. Long liquidations dominated, totaling $149.7 million, according to Coinglass data.

In contrast, net deposits in exchanges were barely above 7,000 ETH, indicating either less spot selling pressure on centralized crypto exchanges or that investors are buying the dip. Hesitation to deposit into exchanges could stem from caution after last week's $6.3 billion Binance hack.

US spot ETH exchange-traded funds (ETF) flows after the market closes will provide insight into how traditional investors are responding. The products posted $53 million in net inflows on Wednesday, their first positive day since the $4.33 million inflows recorded on October 23, per SoSoValue data.

Crypto market declines alongside equities

Ethereum's decline is part of a sharp drop across cryptocurrencies and tech stocks. The overall crypto market cap slid 5%, triggering nearly $1.18 billion in futures liquidations over the past 24 hours.

The move follows a major selloff in US markets. The tech-heavy Nasdaq Composite (NASDAQ) dropped 5% while the S&P 500 fell 4%. AI-related names led the selloff, with the Semiconductor Index (SOX) sliding 10%, as it heads for its worst day since the March 2020 Covid-19 crash.

Traders are potentially moving to the sidelines amid uncertainty over crypto and AI regulations after Democrats gained control of both chambers of Congress in Tuesday's US midterm elections.

Ethereum technical outlook: ETH retests $2,251 support

On the daily chart, ETH has retreated below the 20-, 50- and 100-day Exponential Moving Averages (EMAs), clustered between roughly $2,345 and $2,405 and capping recovery attempts. The Relative Strength Index (RSI) at 40, while the Stochastic near 28, indicates a return to dominant bearish momentum.

On the topside, initial resistance aligns with the 100- and 20-day EMAs around $2,344-$2,348 and the nearby horizontal barrier at $2,355, forming a tight resistance cluster. Those levels are followed by the 50-day EMA at $2,405 before stronger hurdles emerge at $2,548, $2,637, $2,782 and $3,076.

On the downside, immediate support is seen at $2,251, ahead of the next floors at $2,205 and $2,107, while deeper declines could expose the lower supports at $1,972 and $1,828 if sellers regain momentum.

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