The cryptocurrency market remains under pressure on Monday, with Bitcoin and Ethereum extending their losses as investors reassess the outlook for US monetary policy and digital asset regulation. Ethereum has slipped below the $2,200 mark, trading near $2,100, after a 6.5% decline last week, and technical indicators suggest further downside risk.
Political and Macroeconomic Headwinds
The Democratic Party's victories in both chambers of Congress during last week's midterm elections have introduced fresh uncertainty over the future of crypto regulation and artificial intelligence policies. Meanwhile, stronger-than-expected US employment data have reinforced expectations that the Federal Reserve will raise interest rates at its December 9 meeting.
The October Nonfarm Payrolls report showed the economy added 165,000 jobs, with the unemployment rate at 4.1%. According to the CME FedWatch tool, traders assign roughly an 80% probability to a 25-basis-point rate hike, which would bring the target range to 4.00%–4.25%. Higher interest rates typically dampen demand for speculative assets like cryptocurrencies by increasing the appeal of yield-bearing instruments.
ETF Outflows Signal Weak Institutional Demand
Institutional investors have turned increasingly cautious, with US spot Ethereum ETFs recording $365.28 million in net withdrawals last week, extending their losing streak to six consecutive weeks. This prolonged outflow trend underscores weakening institutional demand for ETH, particularly as the cryptocurrency struggles to hold key technical levels.
Persistent ETF outflows can weigh on market sentiment and amplify selling pressure, especially when accompanied by declining prices and weak derivatives positioning. The ongoing redemptions suggest that institutional players are not yet convinced of a near-term recovery.
Technical Outlook: $2,000 in Focus
Ethereum remains below its 200-day EMA at $2,318 and the 50-day EMA at $2,370, indicating that sellers control the market. The daily RSI hovers near 33, approaching oversold territory, while the MACD continues to deepen its negative trajectory, reinforcing the bearish momentum.
With the $2,199 support broken, the immediate focus shifts to the psychological $2,000 level. This area is critical because it aligns with the May 28 high around $1,967, creating a broader support zone where buyers might attempt to defend the price. A decisive breakdown below $2,000 would further weaken Ethereum's technical structure and increase the risk of additional losses.
On the upside, the first significant resistance stands at $2,262, just above the previous support level. An extended rally could push the recovery toward the 200-day EMA at $2,319 and the 50-day EMA around $2,371. However, reclaiming these moving averages would likely require stronger institutional demand and an improvement in overall market sentiment.
Until then, Ethereum remains vulnerable to a retest of $2,000, particularly if ETF withdrawals continue and the Federal Reserve maintains a restrictive policy stance. The combination of political uncertainty, macroeconomic headwinds, and weak technicals suggests that the path of least resistance is lower in the near term.
This article is for informational purposes only and does not constitute financial advice.
