Bitcoin and Ethereum extended losses into Monday as investors recalibrated expectations for US interest rates and digested renewed uncertainty around cryptocurrency regulation. The risk-off tone was reinforced by stronger US employment data and a shift in the political landscape that could reshape policy priorities for both digital assets and artificial intelligence.
Traders are also watching flows from crypto investment products, with exchange-traded funds showing continued outflows that signal weaker institutional demand. With technical signals deteriorating, market participants are bracing for further volatility as the next catalysts approach.
Key takeaways
- Price move: Ethereum was trading slightly above $2,100 after falling about 6.5% last week, and it risked losing the $2,199 support level.
- Catalyst: Expectations for tighter US monetary policy increased after stronger-than-expected labor data and updated market pricing for the Fed’s December 9 meeting.
- Institutional signal: US spot Ethereum ETFs recorded $365.28 million in net withdrawals last week, extending a losing streak to six consecutive weeks.
- Key implication: A breakdown below the $2,000 psychological level would further weaken Ethereum’s technical setup and could invite additional selling.
What drove the move
The selloff in major cryptocurrencies was tied to the intersection of macro data, monetary policy expectations, and political developments in Washington.
According to the October US Nonfarm Payrolls report referenced in the article, the economy added 165,000 jobs while the unemployment rate was 4.1%. That combination pointed to continued labor-market resilience, giving the Federal Reserve room to maintain a restrictive stance for longer.
Market-implied expectations moved in step with the labor data. According to CME FedWatch figures cited in the report, traders assigned roughly an 80% probability to a 25-basis-point rate increase at the Fed’s December 9 meeting, which would lift the target range to 4.00%–4.25%.
Higher interest rates tend to weigh on speculative assets because they increase the attractiveness of interest-bearing alternatives and can tighten broader financial conditions, often reducing liquidity in risk markets—including crypto.
Political uncertainty also played a role. The report noted that the Democratic Party’s victories in both chambers of Congress following last week’s US midterm elections raised questions about the direction of crypto asset regulation and the governance of artificial intelligence development. Investors appeared to be positioning cautiously amid uncertainty about potential policy changes.
Market reaction: flows and risk sentiment
Beyond macro drivers, the article highlighted weakening institutional demand as a direct pressure point for prices. It cited data from US spot Ethereum ETFs, which showed $365.28 million in net withdrawals last week and extended the streak of outflows to six consecutive weeks.
Prolonged ETF withdrawals can translate into persistent selling pressure, especially when price momentum is already negative. The report linked the outflow trend with broader market caution, suggesting that investor hesitation is reinforcing downward pressure rather than stabilizing the market.
In this environment, crypto assets can become more sensitive to incremental negative catalysts. With institutional positioning likely to remain lighter if outflows continue, traders may be more willing to take risk off the table during periods of technical weakness.
Ethereum’s technical picture and key levels
The article described Ethereum’s attempt to stabilize as fragile, with the coin trading slightly above $2,100 on Monday after dropping roughly 6.5% over the prior week.
It said Ethereum remains below key trend indicators, including the 200-day moving average near $2,318 and the 50-day moving average around $2,370. Those levels are framed as resistance areas that buyers must reclaim to signal a durable recovery.
Momentum indicators also pointed to continued selling pressure. The report noted that the daily RSI was hovering near 33, close to oversold conditions, and that the MACD was moving deeper into negative territory—signals that often accompany prolonged downtrends.
On support and resistance, the article said the $2,199 level had been broken earlier, shifting near-term attention to the psychological $2,000 mark. It added that this area aligns with a broader support zone close to a May 28 high around $1,967, which could attract defensive buying if sentiment stabilizes.
However, a decisive move below $2,000 would likely weaken Ethereum’s technical structure further and raise the risk of additional losses. If ETH stabilizes instead, the report identified the next resistance near $2,262, followed by potential recovery levels around the $2,318 and $2,371 moving averages—targets that may require improved institutional demand and a broader market turnaround.
Bigger picture: rates, politics, and what to watch next
With investors focused on whether the Federal Reserve will tighten further at its December 9 meeting—and with policy uncertainty around both crypto regulation and artificial intelligence—crypto assets may remain highly reactive to incremental developments.
For the near term, the next key signals are likely to include continued ETF flow trends, follow-through (or reversal) around the $2,000 support level for Ethereum, and additional US economic data that could shift expectations for the path of interest rates.
