The crypto market is having a rough week. Thursday's trading session saw major digital assets tumble alongside traditional equities, driven by economic data that complicated the Federal Reserve's rate-cutting timeline. And when the Fed picture gets murky, risk assets tend to take it on the chin.

Here's where the major cryptocurrencies stood as of 8:25 p.m. ET:

Bitcoin's Painful Retreat From the Highs

Bitcoin crashed through the $87,000 level Thursday, marking its first visit to these depths in seven months. The world's largest cryptocurrency is now sitting 30% below the all-time highs it set just six weeks ago. That's a brutal reversal in a remarkably short timeframe. Bitcoin bounced around between $86,040.80 and $93,025.07 during Thursday's session, unable to find solid footing.

Ethereum had an equally rough day, briefly dipping below $2,800 before clawing back some losses overnight. The second-largest cryptocurrency has now completely erased all gains made since mid-July. That's months of progress vanished.

The carnage triggered a wave of liquidations. According to data from Coinglass, roughly $821 million in positions got liquidated over the past 24 hours, with nearly $700 million of that coming from long positions. Ouch. Though there's a silver lining for bulls: approximately $383 million in short positions would face liquidation if Bitcoin manages to reclaim the $95,000 level.

Bitcoin's open interest dropped 2.55% in the last 24 hours. Zoom out further and the picture gets worse. Since Bitcoin hit its all-time high on October 7th, more than $28 billion locked in derivatives has evaporated.

Sentiment indicators reflect the pain. The Crypto Fear & Greed Index registered "Extreme Fear," suggesting investors are deeply nervous about near-term price action.

Top Gainers (24 Hours)

The global cryptocurrency market capitalization slipped below $3 trillion after declining 4.25% in the last 24 hours.

Jobs Data Throws Cold Water on Rate Cut Expectations

Stocks didn't fare much better Thursday. The Dow Jones Industrial Average dropped 386.51 points, or 0.84%, to close at 45,752.26. The S&P 500 fell 1.56% to end at 6,538.76, while the Nasdaq Composite shed 2.16% to finish at 22,078.05.

Even Nvidia (NVDA) couldn't escape the selloff, closing down 3% despite posting strong earnings and guidance earlier in the session. When even the AI darling can't hold gains on good news, you know sentiment is poor.

The culprit? Non-farm payrolls jumped by 119,000 in September, a figure that revived growth optimism but simultaneously cast doubt on whether the Federal Reserve will cut rates in December. As of Thursday evening, traders were pricing in just a 39% chance of a 25 basis point rate cut in December, down from 50% a week earlier, according to the CME FedWatch tool.

That shift matters because crypto has increasingly moved in tandem with rate expectations. When the Fed looks likely to keep rates higher for longer, liquidity concerns tend to weigh on speculative assets like digital currencies.

Why Ethereum's $2,800 Level Matters

Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet, pointed out that the cryptocurrency market's increased correlation with traditional finance is a double-edged sword.

"That link is ultimately positive for long-term adoption, even if it creates short-term pressure," Elkaleh told MarketDash.

He noted that reduced liquidity expectations can weigh on both Bitcoin and Ethereum, triggering "risk-off sentiment" in the near term. But he's not ready to call this the start of a bear market.

"I view the next few months as a healthy recalibration rather than the start of prolonged weakness, helping flush out speculative excess and setting the stage for more stable growth," Elkaleh said.

On-chain analytics firm CryptoQuant highlighted why Ethereum's current price level is particularly significant. The $2,800 mark aligns with realized price clusters from both retail and whale investors, making it an "important" support level.

"Historically, realized price levels have often marked cycle bottoms, suggesting that this range could once again provide a foundation for a short-term rebound," the firm noted.

Whether that support holds could determine if Ethereum stages a recovery or continues its slide. For now, crypto investors are watching closely as the market digests the Fed's changing rate outlook and tests critical technical levels.