Ethereum's price has fallen below the psychologically important $2,000 mark, extending a sharp decline that has gripped the cryptocurrency market. The second-largest digital asset by market capitalization is currently trading around $1,932, down approximately 6% over the past 24 hours.
The sell-off was triggered by a sharp drop in artificial intelligence-related stocks, following reports that Nvidia CEO Jensen Huang had resigned. The news unsettled investors and sparked declines across several AI infrastructure companies, with the broader cryptocurrency market also feeling the pressure. Total crypto market capitalization fell about 5.4% in a day, reflecting the widespread risk-off sentiment.
Ethereum has been particularly sensitive to these shifts, as digital assets have increasingly moved in tandem with technology stocks. The latest decline pushed ETH below the $2,000 support level, a key threshold that had held for several weeks. The move has intensified bearish sentiment, with traders now eyeing the next major support zone near $1,700.
Liquidations and ETF Outflows Add to Pressure
The sharp drop triggered significant liquidations in the derivatives market, particularly among traders who had bet on higher prices. According to CoinGlass, approximately $285.4 million in ETH positions were liquidated over the past 24 hours, with long positions accounting for $258 million of that total. This suggests that bullish traders suffered the largest losses during the sell-off.
Institutional demand for Ethereum continues to deteriorate, adding another obstacle to any recovery. Data from SoSoValue shows that US spot Ethereum ETFs recorded $144.8 million in net outflows on Wednesday, followed by another $8 million on Thursday. These withdrawals extend a period of weak demand, with the investment products recording only one day of positive net flows since the beginning of November.
Persistent ETF outflows suggest that investors are reducing their exposure to Ethereum through regulated investment vehicles. Sustained withdrawals can weaken sentiment and contribute to selling pressure in the underlying market, making it harder for the cryptocurrency to stage a meaningful rebound.
Technical Outlook: Bearish Signals Dominate
Ethereum's technical indicators remain firmly bearish following its decline below $2,000. At the time of writing, ETH trades around $1,932, maintaining a bearish bias as it remains below its major daily Exponential Moving Averages (EMAs). The 20-day EMA stands near $2,227, while the 100-day EMA is positioned around $2,320. The 50-day EMA sits at approximately $2,334, creating another significant resistance barrier above the current market price.
Trading below these moving averages suggests that sellers remain in control of the short- and medium-term trend. The concentration of resistance between $2,227 and $2,334 indicates that any recovery attempts could encounter substantial selling pressure.
Momentum indicators reinforce the bearish outlook. The 14-day Relative Strength Index (RSI) has fallen to approximately 24, placing Ethereum in oversold territory. Meanwhile, the Stochastic Oscillator stands near 8, reflecting extremely weak short-term momentum.
Ethereum has dropped below the crucial support at $1,971. With the daily candle closed below this support, sellers are looking to push Ethereum towards lower demand zones in the near term. The next significant support stands around $1,827, followed by another horizontal level near $1,706. These levels could attract buying interest if Ethereum's decline continues.
Potential for a Temporary Bounce
Despite the prevailing bearish conditions, Ethereum's deeply oversold momentum indicators suggest that a temporary recovery remains possible. The first important resistance stands at $2,101. A sustained recovery above this level would suggest that buyers are beginning to regain some control.
Beyond $2,101, the next significant resistance stands at $2,204. A breakout above this barrier could encourage buyers to target the 20-day EMA near $2,227, followed by the horizontal resistance around $2,250. Further resistance stands at the 100-day EMA near $2,320 and the 50-day EMA around $2,334.
Reclaiming these moving averages would improve Ethereum's technical structure and provide stronger evidence of a sustained recovery. However, until that happens, the path of least resistance remains to the downside, with the $1,700 area as the next major target.
This article is for informational purposes only and does not constitute financial advice.
