As a seasoned crypto investor with several years of experience under my belt, I’ve learned that market reactions to regulatory news can be unpredictable. The recent approval of Ethereum spot ETFs by the SEC was a highly anticipated event, and while some investors may have been eager to capitalize on this development, others appear to have taken profit or cut their losses following the sell-off.
The approval of the Ethereum ETF has resulted in a significant increase in long liquidations on cryptocurrency exchanges, indicating that many traders sold their positions following this news event.
Ethereum Price Has Been Down Since Spot ETFs Gained Approval
Yesterday, the SEC granted approval for all eight Ethereum spot ETF proposals under review.
Investment tools called Spot ETFs enable investors to experience the price fluctuations of Ethereum (ETH) without having to directly possess any tokens.
As an analyst, I would explain that for individuals who prefer conventional investment methods and find cryptocurrency exchanges and wallets intimidating, they have the option of investing in Exchange-Traded Funds (ETFs) instead. ETFs provide a more traditional avenue for accessing the asset class, allowing investors to benefit from the potential growth of the cryptocurrency market without having to directly deal with the complexities of buying and storing digital assets.
The market was looking forward to this occurrence, similar to the Bitcoin ETF approval in January. Subsequently, the investments into BTC via these ETFs triggered a surge towards a fresh record high (ATH).
When Bitcoin ETFs received approval from regulators for the first time, investors initially responded by selling, leading to a substantial drop in the value of the cryptocurrency.
The approval of an Ethereum spot ETF seems to have coincided with a downturn for coins in the sector, resulting in a drop of over 5% for Ethereum alone within the past 24 hours.
As a financial analyst, I would put it this way: Even though Ethereum has experienced a decrease in value recently, investors who held onto their coins are still looking at substantial gains. With Ethereum currently priced at around $3,700, there is a 23% increase compared to its price just one week ago.
As a crypto investor, I’ve noticed an unexpected turn of events. The approval, which came suddenly, led to a massive selloff. The derivatives market seems to have been taken aback by this development, resulting in significant liquidations within the past 24 hours.
$384 Million In Cryptocurrency Contracts Found Liquidation In Past Day
Based on information from CoinGlass, there has been a significant sell-off in the cryptocurrency derivatives market over the last 24 hours. Here’s a look at the figures:
I’ve analyzed the data and found that approximately $384 million worth of cryptocurrency contracts have been forcibly closed during this timeframe. Amongst these, over $297 million were related to long positions only.
Seven out of every ten investors with a bullish perspective placed their bets during this period, given the recent market trend that has seen prices trending downward.
As a crypto investor, I can confirm that Ethereum’s significant role in the recent market turbulence is evident in the data. The heatmap below clearly shows that Ethereum was responsible for the largest portion of the liquidation squeeze we have witnessed.
Ethereum’s liquidations exceeding $150 million surpass Bitcoin’s $74 million in contract terminations.
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2024-05-24 21:41