April 19, 2024
Bearish Traders Liquidate $11 Million in Short Ether Positions: The Impact of ETH Price Surges
Altcoins News

Bearish Traders Liquidate $11 Million in Short Ether Positions: The Impact of ETH Price Surges

As major financial institutions prepared a formal plan to issue ether futures ETFs in the U.S., short positions on ether (ETH) faced the brunt of futures liquidations during the previous 24 hours.

Following news of impending ether futures ETF listings, ether prices increased by as much as 5%, and trading volumes increased by about 25%. On Friday afternoon in Asia, ether traded at $1,660, boosting gains to more than 6% since Monday.

Prices were probably boosted because traditional financial players, who have so far had few choices to trade the second-largest coin by market value, may have increased their demand for ether in anticipation of a swift clearance.

Bloomberg ETF analyst Eric Balchunas Ether futures ETFs are “highly likely (90% odds) to start rolling out in early October. In a subsequent tweet, Balchunas claimed, citing sources, that the U.S. Securities and Exchange Commission (SEC) desired to “accelerate the launch” of these futures.

However, the price increase took bearish traders off guard. According to Coinglass statistics, traders who were shorting ether futures on cryptocurrency exchanges or betting against the commodity liquidated almost $11 million worth of positions. On Thursday, this accounted for about 85% of all ether liquidations.

When an exchange forcibly terminates a trader’s leveraged position as a result of a partial or complete loss of the trader’s original margin, this is referred to as liquidation. This occurs when a trader lacks the cash to keep the trade open or is unable to match the required margin for a leveraged position.

According to the statistics, OKX traders made up about a third of all holdings that were liquidated, followed by Binance and Huobi.

The asset management company VanEck, which manages $77.8 billion in assets, announced on Thursday that it was getting ready to launch its ETH futures ETF, which would invest in standardized, cash-settled ETH futures contracts traded on commodities exchanges licensed with the Commodities Futures Trading Commission (CFTC).

The VanEck Ethereum Strategy ETF (EFUT) is the name of the fund, which will be listed on the CBOE.

Image: Unsplash

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