Ethereum Crashes Below $3,300 as $1.3 Billion Crypto Sell-Off Intensifies Amid Fed Rate Uncertainty
Darius Baruo Nov 05, 2025 10:16
ETH price plunges to $3,288.53 (-5.8%) as Federal Reserve hawkish commentary triggers massive liquidations, pushing Ethereum below critical $3,500 support level in broader market rout.
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
Market Events Driving Ethereum Price Movement
The ETH price decline intensified today following hawkish commentary from U.S. Federal Reserve Governors, creating uncertainty about future rate cuts despite the recent 25-basis-point reduction on October 29. This 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, as the broader crypto market experienced what traders are calling a "bloodbath." The decline resulted in over $1.14 billion in long position liquidations on November 3 alone, with Ethereum accounting for $85.6 million of these forced closures.
Adding to market concerns, the Balancer protocol suffered a $128 million exploit across multiple chains, raising fresh questions about DeFi security and potentially dampening institutional appetite for Ethereum-based applications. While this represents a relatively small portion of the overall Ethereum ecosystem, such incidents 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, though this long-term catalyst appears insufficient to counter current selling pressure.
ETH Technical Analysis: Oversold Conditions Emerge
Price Action Context
Ethereum technical analysis reveals a concerning picture as ETH price 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 from 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 of over $5 billion on Binance spot suggests 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 indicating potential for short-term bounces. However, 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 ETH price is trading below the lower band, a condition that typically precedes either reversal or extended downside continuation. The daily ATR of $231.85 reflects elevated volatility, creating both risk and opportunity for active traders.
Critical Price Levels for Ethereum Traders
Immediate Levels (24-48 hours)
• Resistance: $3,500 (former support now 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 $3,500 would signal potential stabilization, with initial upside targets at $3,650 (7-day SMA) and $3,844 (20-day SMA).
ETH Correlation Analysis
Ethereum continues following 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.
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 $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 downside toward $2,800, where significant buying interest historically emerges.
Risk Management
Conservative traders should consider stop-losses below $3,000 for long positions, while 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.
Image source: Shutterstock.jpg)