According to Coinglass data, liquidation in the crypto market soared to $155.21 million over the last 24 hours. Ethereum (ETH), the second-largest digital asset topped the chart, recording liquidations of $27.8 million.
Overview of Crypto Market Liquidation
Analyzing the data, of the $26.38 million liquidations on ETH, long positions accounted for $20.16 million, while short was $7.65 million. Meanwhile, Bitcoin (BTC) saw liquidations of $23.09 million, long positions amounted to $20.36 million, while short traders recorded $6.99 million in liquidations.
Memecoins such as Pepecoin (PEPE), Shiba Inu (SHIB), and Dogecoin (DOGE) experienced liquidations of $4.76 million, $1.98 million, and $5.15 million. Per liquidations from crypto exchanges, Binance takes the lead with $17.77 million, followed by OKX with $15.28 million.
In crypto, liquidations occur when traders convert assets, usually leveraged positions or collateral, into cash to cover losses or repay borrowed funds when the market moves unfavorably. In the context of futures trading, liquidation is common in situations where traders borrow money to improve their exposure to a trading position.
Implications for Ethereum
Ethereum topping the 24-hour liquidation chart means many margin positions are getting liquidated. The price of the digital asset is also experiencing a notable drop that triggered these liquidations. As of the last CoinMarketCap data, ETH decreased by 2.3% to trade at $3,703 within the past day. The trading volume also decreased by 10.55% to $16.9 billion, indicating dwindling interest from investors.
Moreover, the high liquidation volume suggests a shift in market sentiment, with traders potentially losing confidence in the price movement. Ethereum’s recent price movement contradicts expectations from analysts and investors.
The approval of eight spot Ethereum ETF by the SEC last week in the United States was anticipated to cause a spiral in the price of the cryptocurrency. However, the reverse seems to be the case. While it is uncertain why Ethereum’s price is dropping, it coincides with bearish sentiments in the broader crypto market.
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