Ethereum Longs Crushed, Leaving Many Traders in $62 Million Loss😳
Ethereum (ETH) traders experienced a harsh reality the past week as the derivatives market saw a massive spike in long liquidations. Coinglass data reveals this was the largest long liquidation event since May 23rd, signaling a sharp correction for those betting on ETH's price rise.
Investors heavily invested in long positions, betting on an Ethereum price increase, faced an unexpected market downturn. As prices dropped below the margin requirement set by exchanges, these positions were forcibly closed to prevent further losses. The result? Over $60 million in liquidations.
Amidst the market turmoil, a positive Funding Rate provided a glimmer of optimism. This rate indicates the fees paid by short position holders to long position holders, reflecting stronger demand for long positions. Despite the massive liquidations, the Funding Rate has remained positive since May 3rd, suggesting some investors still have faith in Ethereum's long-term potential.
While the positive Funding Rate offers some hope, the broader market activity paints a less optimistic picture. The past 24 hours saw a 50% drop in options trading volume and a 2% decrease in Open Interest (total outstanding contracts). This indicates a potential retreat from the market, with fewer traders actively engaging in options or holding positions.
Looking ahead, CoinCodex predicts a 2.46% rise in Ethereum's price to $3,636 by July 13, 2024. Despite this positive projection, market sentiment remains mixed. The Fear & Greed Index stands at 70 (Greed), showing strong investor interest, but the overall market mood is cautious.
Over the past 30 days, Ethereum has shown significant volatility, with gains on 53% of the days and an overall price fluctuation of 8.63%. While short-term predictions are hopeful, the mixed signals and recent liquidations underscore the need for careful investment in the unpredictable crypto market.
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