Ethereum Crashes Below $3,300 as $1.3 Billion Crypto Sell-Off Intensifies Amid Fed Rate Uncertainty
**Quick Take**
– ETH trading at $3,288.53 (down 5.8% in 24h)
– Federal Reserve uncertainty triggers $1.3 billion crypto market sell-off
– Ethereum breaks below $3,500 support with $85.6M in liquidations
– Following Bitcoin’s decline amid broader risk-off sentiment
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### Market Events Driving Ethereum Price Movement
The decline in Ethereum (ETH) price intensified today following hawkish commentary from U.S. Federal Reserve Governors. This created uncertainty about future rate cuts despite the recent 25-basis-point reduction on October 29. The resulting macroeconomic pressure contributed to a staggering $1.3 billion sell-off across the crypto market, with Ethereum bearing significant impact.
Yesterday’s breach of the $3,500 support level marked a critical technical breakdown for Ethereum. The broader crypto market experienced what traders are calling a “bloodbath,” resulting in over $1.14 billion in long position liquidations on November 3 alone. Ethereum accounted for $85.6 million of these forced closures.
Adding to market concerns, the Balancer protocol suffered a $128 million exploit across multiple chains. This incident raises fresh questions about DeFi security and could potentially dampen institutional appetite for Ethereum-based applications. While this represents a relatively small portion of the overall Ethereum ecosystem, such events historically create temporary headwinds for ETH price momentum.
On a more positive note, the upcoming Ethereum Fusaka upgrade, scheduled for December 3, aims to improve network performance and scalability. However, this long-term catalyst appears insufficient to counter the current selling pressure.
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### ETH Technical Analysis: Oversold Conditions Emerge
**Price Action Context**
Ethereum’s technical analysis reveals a concerning picture as ETH trades well below all major moving averages except the 200-day SMA at $3,378.49. The current price of $3,288.53 sits approximately 10% below the 20-day SMA ($3,844.02) and 20% below the 50-day SMA ($4,094.86), indicating sustained selling pressure based on Binance spot market data.
ETH price is following Bitcoin’s bearish trajectory, with both assets declining in tandem as institutional investors reduce risk exposure. Trading volume exceeding $5 billion on Binance spot signals genuine institutional participation in the sell-off rather than retail-driven panic.
**Key Technical Indicators**
– The daily RSI reading of 29.44 places Ethereum firmly in oversold territory, historically signaling potential for short-term bounces.
– The MACD histogram at -57.47 shows bearish momentum remains strong, suggesting any relief rally may be limited.
– Ethereum’s position at -0.14 on the Bollinger Bands %B indicator means the price is trading below the lower band, a condition that typically precedes either a reversal or extended downside continuation.
– The daily ATR of $231.85 reflects elevated volatility, creating both risk and opportunity for active traders.
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### Critical Price Levels for Ethereum Traders
**Immediate Levels (24-48 hours):**
– **Resistance:** $3,500 (former support now turned resistance)
– **Support:** $3,057.00 (24-hour low and strong support level)
**Breakout/Breakdown Scenarios:**
– A break below $3,057 support could accelerate selling toward the $2,800–$2,900 range, where longer-term buyers may emerge.
– Conversely, reclaiming the $3,500 level would signal potential stabilization, with initial upside targets at $3,650 (7-day SMA) and $3,844 (20-day SMA).
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### ETH Correlation Analysis
Ethereum continues to follow Bitcoin’s lead, with both assets declining as traditional risk assets face pressure from Federal Reserve uncertainty. The correlation remains high as institutional flows treat crypto as a unified risk asset class during periods of macroeconomic stress.
Traditional markets showed mixed signals, with equity volatility contributing to the crypto sell-off as investors seek safer havens amid rate uncertainty. Gold’s performance as a traditional hedge suggests investors are rotating toward established store-of-value assets rather than digital alternatives.
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### Trading Outlook: Ethereum Near-Term Prospects
**Bullish Case**
– Oversold RSI conditions could trigger short-term relief rallies, particularly if Bitcoin stabilizes above key support levels.
– The December 3 Fusaka upgrade provides a fundamental catalyst that could attract buying interest as the date approaches.
– ETH price recovery above $3,500 would signal technical repair and potential for testing the $3,800–$4,000 resistance zone.
**Bearish Case**
– Continued Federal Reserve hawkishness could extend the crypto market decline, with Ethereum particularly vulnerable given its correlation with institutional risk appetite.
– A break below $3,057 support opens the downside toward $2,800, where significant buying interest has historically emerged.
**Risk Management**
– Conservative traders should consider stop-losses below $3,000 for long positions.
– Short-term traders might target $3,500 resistance for potential short entries.
– Given the elevated ATR reading, position sizing should account for continued high volatility in both directions.
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*Image source: Shutterstock*
https://Blockchain.News/news/20251105-ethereum-crashes-below-3300-as-13-billion-crypto-sell-off
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