Ethereum slides toward $2,000 as bitcoin faces support test

What happened

Bitcoin and Ethereum have both retreated from recent highs amid intensifying selling pressure and deteriorating technical conditions. Bitcoin traded near $80,108 on October 29, down over 1.5% in a single day, while Ethereum fell to around $2,322 after failing to sustain a recovery attempt toward $2,400. The declines are part of a broader crypto market decline that erased $68.75 billion in value over 24 hours, reducing the market's total capitalization to $2.75 trillion.

Ethereum has proven particularly vulnerable, having dropped roughly 15% over the past month and now trading just above $2,300. According to analysis from CryptoPotato, the asset approached $2,400 on October 28 when on-chain transaction volume surged past $100 billion, but the price was subsequently rejected. Analysts warn that if selling pressure persists, the technical chart pattern points toward the $2,000 level as a potential downside target.

Bitcoin's weakness has been accompanied by significant liquidations across the crypto market. In a single day, $342.38 million in positions were liquidated affecting 83,748 traders, with 65% of those liquidations coming from long positions. The sell-off extends beyond digital assets, as major technology stocks have also declined sharply, adding to pressure across financial markets.

Why it matters

The breakdown in Bitcoin and Ethereum carries implications for the broader risk asset market. Both cryptocurrencies have been moving in tandem with technology stocks and other risk assets, suggesting that market-wide pressures are driving the decline rather than cryptocurrency-specific factors. Bitcoin's test of support levels around $79,172 and $78,416 will be closely watched by traders, as further breaks could accelerate selling. For Ethereum, a fall to the $2,000 level would represent a significant capitulation from recent highs and could trigger additional liquidations in leveraged positions.

What the data shows

On-chain data reveals significant institutional repositioning. Analyst Ali Martinez documented that large holders reduced their Ethereum exposure by roughly 160,000 ETH, valued at approximately $348 million, over just five days. Simultaneously, exchange balances increased by around 100,000 ETH worth roughly $240 million, indicating that holders are moving coins to platforms where they can be sold more readily. Ethereum ETFs have recorded approximately $170 million in outflows since the start of the week, adding to the selling pressure. Bitcoin has tested support near $79,725, while Ethereum's Relative Strength Index has fallen to just above 30, approaching oversold territory on some technical measures.

Background

The current market weakness follows a period of resilience for cryptocurrencies. Bitcoin had been hovering near $84,000 over the past week before the recent selloff began. The timing of the crypto decline correlates with disappointing earnings reports from major technology companies. Alphabet shares dropped approximately 11% after reporting third-quarter revenue of $127.58 billion against expectations of $127.93 billion, while Samsung's semiconductor division also underperformed investor expectations, contributing to market-wide risk aversion.

What to watch

Key price levels will determine whether the decline accelerates or stabilizes. For Bitcoin, support rests at $79,172 and $78,416, with analyst Michael van de Poppe identifying $76,269 as a deeper downside target if selling intensifies. On the upside, Bitcoin needs to reclaim $80,920 to improve its short-term outlook. For Ethereum, the $2,000 psychological level has become the focal point for analysts. Ethereum's chart shows a move toward $2,026.94 as a potential downside target if the current pattern plays out. Both assets will need to show signs of stabilization or renewed demand to reverse the negative momentum.

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