As a researcher with a background in financial markets and experience observing crypto price movements, I find today’s volatility in the crypto market particularly intriguing. The U.S. regulatory decision to approve or deny spot-based ether ETFs created an anxious atmosphere among traders, leading to wild swings in both Ethereum (ETH) and Bitcoin (BTC) prices.
On Thursday, crypto markets experienced significant volatility as investors kept a close eye on the anticipated U.S. regulatory announcement regarding the approval of ETFs based on ethereum’s spot price.
In the midst of today’s market turmoil, I witnessed a significant increase in liquidations of leveraged crypto derivatives, amounting to over $350 million according to CoinGlass data – the highest since May 1st.
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When an exchange forcibly ends a leveraged trade because the trader has lost a significant portion or all of their initial investment, also known as margin, and is unable to cover the required maintenance costs or meet the margin calls.
Approximately 80% of the wiped-out trading positions, valued at around $250 million, were long bets placed on rising prices. This indicates that a large number of traders with heavy leverage were taken aback by the unexpected price drop. Traders dealing in Ether suffered the most significant losses, amounting to approximately $132 million in liquidations, while Bitcoin derivatives saw about $70 million worth of liquidations.
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2024-05-24 01:42