Ethereum rallies to 20-month high as Bitcoin ETF approval spurs altcoin gains

Several large-cap cryptocurrencies, including Ethereum, Solana, Cardano, and others, rallied following the approval of a spot Bitcoin exchange-traded fund (ETF) in the U.S.

BTC’s price mostly traded flat following the news, posting a modest 1.35% gain to trade at $46,258 as of press time. This price performance is surprising considering the hype and enthusiasm the applications generated over the past several months.

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Several analysts had predicted that the ETF approval could be a “sell-the-news” development. K33 research senior analyst Vetle Lunde claimed that BTC’s price performance following the SEC fake ETF approval rumors of Jan. 9 showed that the “ETF approval rehearsal favors a sell-the-news reaction.”

However, crypto analyst Michaël van de Poppe chimed that BTC’s price might improve “with the deal-flow on the ETF approval.” He added that this might be the cycle BTC’s price going above $300,000.

Meanwhile, data from CryptoSlate show that the other top 10 digital assets by market capitalization, barring stablecoins, recorded gains of more than 4% during the past day. Notably, ETH jumped 10% to more than $2600, its highest value since May 2022.

Similarly, the high-flying SOL token is up 4% to reclaim the $100 level, while ADA, BNB, Avalanche, XRP, and Dogecoin gained 14%, 5%, 13%, 6%, and 7%, respectively.

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Additionally, the overall crypto market rose 4% to $1.77 trillion.

Over $270 million liquidation trails ETF approval

The price performance of these digital assets resulted in the liquidation of approximately $272 million from more than 85,000 traders.

Coinglass data shows that Bitcoin traders lost nearly $85 million during the reporting period, with most of the losses borne by traders betting on a bullish price movement for the top cryptocurrency.

Conversely, Ethereum’s price surge resulted in significant losses for short traders betting against an upward price movement. This cohort of traders lost $54 million, while long traders incurred approximately $30 million in losses.

Notably, the single most substantial liquidation was a $3.81 million short position against Ethereum on Binance.

Other prominent assets such as Solana, XRP, and BNB also saw liquidations amounting to $12.53 million, $3.81 million, and $793,000, respectively.

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Meanwhile, traders on Binance and OKX accounted for more than $190 million of the total losses during the reporting period.

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Author: Oluwapelumi Adejumo

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