Cryptocurrency Market Faces Widespread Pullback: AI Sector Drops Nearly 9%, ETH Slips Below $3,900

The cryptocurrency market is undergoing a broad correction, with various sectors experiencing declines ranging from 2% to 9% over the past 24 hours, according to SoSoValue data. Leading the downturn is the AI sector, which has plummeted 8.60%, highlighting vulnerabilities in AI-related tokens amid shifting market sentiment. This pullback comes as Ethereum (ETH) dips 2.15% to break below the critical $3,900 level, while Bitcoin (BTC) sees a milder 0.98% decline, briefly falling under $107,000 before rebounding above $100,000. Traders should monitor these key levels closely, as they could signal potential support zones or further downside risks in the volatile crypto landscape.

In the AI sector, notable performers include Virtuals Protocol (VIRTUAL) down 10.96%, Fartcoin (FARTCOIN) dropping 13.75%, and ChainOpera AI (COAI) suffering a massive 41.71% plunge as of October 31, 2025. These movements suggest profit-taking or reduced investor enthusiasm for AI-driven projects, possibly influenced by broader tech market corrections. For traders eyeing entry points, watching trading volumes is essential; a spike in on-chain activity could indicate accumulation at lower prices. Meanwhile, ETH's breach of $3,900 might test the next support around $3,800, based on historical price action, offering scalping opportunities for those using ETH/USD or ETH/BTC pairs on major exchanges.

Performance Across Other Crypto Sectors: Opportunities Amid the Decline

Beyond AI, the market shows mixed signals with some tokens bucking the trend. The CeFi sector fell 2.87%, but WhiteBIT Token (WBT) rose 2.30%, demonstrating resilience that could attract swing traders looking for relative strength plays. In Layer1 protocols, a 3.74% drop was led by Sui (SUI) at 7.15% down, potentially creating buying dips for long-term holders monitoring blockchain metrics like transaction counts. PayFi saw a 3.78% decline, yet eCash (XEC) gained 2.05%, hinting at niche demand in payment-focused cryptos. Meme coins dropped 4.70% overall, but MemeCore (M) surged 7.69%, showcasing the speculative nature of this space where viral momentum can drive quick reversals.

DeFi and Layer2 sectors faced steeper corrections, with DeFi down 5.16% despite Aerodrome Finance (AERO) climbing 6.99% intraday, and Layer2 plunging 7.46% led by Mantle (MNT) at 10.25% loss. These figures underscore a risk-off environment, where traders might pivot to hedging strategies using futures contracts on BTC or ETH. From a trading perspective, analyzing cross-pair correlations—such as ETH/BTC ratio dropping below 0.036—could reveal arbitrage chances. Institutional flows, if tracked via on-chain data, might show whale accumulations in BTC around $100,000, providing bullish signals amid the callback.

Trading Strategies and Market Implications for Crypto Investors

For those navigating this pullback, focusing on technical indicators like RSI and MACD on 4-hour charts for BTC and ETH could help identify oversold conditions. BTC's rebound from below $107,000 to above $100,000 as of October 31, 2025, suggests strong support at psychological levels, potentially setting up for a bounce if volume picks up. ETH traders should watch resistance at $4,000, with a failure to reclaim it possibly leading to further tests of $3,700. In AI tokens, the sharp declines in VIRTUAL and FARTCOIN might offer short-selling opportunities, while COAI's 41.71% drop could be a capitulation event, drawing in value hunters if sentiment shifts.

Broader market sentiment appears cautious, with correlations to stock indices like the Nasdaq potentially amplifying moves in AI cryptos. Traders interested in diversification might explore pairs like BTC/USDT for stability or altcoin/BTC for relative plays. Remember, always use stop-losses in volatile periods, and consider on-chain metrics such as active addresses for ETH, which could signal network health despite price dips. This correction, while challenging, presents tactical trading setups for those attuned to market dynamics.

Overall, this widespread callback emphasizes the importance of risk management in crypto trading. With sectors like Layer2 and DeFi showing deeper losses, investors should prioritize high-liquidity assets like BTC and ETH. As the market evolves, staying updated on real-time data and sector rotations could uncover profitable opportunities amid the volatility.