Ethereum: Who Got Burned In The $62 Million Fire Sale?


Ethereum
(ETH)
bulls
got
a
taste
of
fire
on
June
11th
as
the
altcoin’s
derivatives
market
witnessed
a
dramatic
surge
in
long
liquidations.
According
to
data
from

Coinglass,
this
event
marked
the
highest
level
of
long
liquidations
since
May
23rd,
signifying
a
significant
correction
for
traders
who
bet
on
rising
prices.

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Related
Reading


Crimson
Chart:
Long
Positions
Liquidated

Overconfident
investors
piled
into
long
positions,
essentially
placing
a
wager
that

Ethereum’s
price
would
climb.
However,
the
market
had
other
plans.
An
unexpected
price
drop
sent
shivers
down
the
spines
of
these
bulls,
triggering
a
wave
of
liquidations.

Source:

Coinglass

As
the
price
dipped
below
a
certain
threshold
set
by
the
exchange
(known
as
the
margin
requirement),
these
positions
were
forcefully
closed
to
prevent
further
losses
for
the
unfortunate
traders.
The
result?
A
collective
sigh
of
relief
for
some
exchanges,
but
a
hefty
bill
for
liquidated
bulls,
totaling
over
$60
million
on
that
fateful
day.


Positive
Funding
Rate
Offers
A
Glimmer
Of
Hope

While
the
market
correction
sent
shockwaves
through
the
Ethereum
derivatives
landscape,
a
silver
lining
emerged
in
the
form
of
a
positive
Funding
Rate.
This
metric
essentially
reflects
the
fees
paid
by
traders
holding
short
positions
(betting
on
a
price
decline)
to
those
holding
long
positions.

ETHUSD
trading
at
$3,507
on
the
24-hour
chart:

TradingView.com

In
simpler
terms,
a
positive
Funding
Rate
indicates
a
stronger
demand
for
long
positions,
suggesting
that
even
amidst
the
carnage,
some
investors
remain
optimistic
about
Ethereum’s
long-term
prospects.
This
positivity
is
further
bolstered
by
the
fact
that
ETH’s
Funding
Rate
hasn’t
dipped
into
negative
territory
since
May
3rd.

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A
Temporary
Hiccup?

The
jury’s
still
out
on
whether
this
event
represents
a
fleeting
blip
or
a
more
concerning
trend.
While
the
positive
Funding
Rate
offers
a
glimmer
of
hope,
the
significant
drop
in
derivatives
activity
paints
a
different
picture.

Source:
Coinglass

The
past
24
hours
have
seen
a
worrying
decline
in
both
options
trading
volume
(down
50%)
and
Open
Interest
(total
outstanding
contracts,
down
2%).
This
suggests
a
potential
flight
from
the
market,
with
fewer
participants
actively
trading
options
contracts
or
holding
open
positions.


Ether
Price
Forecast

Meanwhile,
the
current

Ethereum
price
prediction
by
CoinCodex
suggests
a
2.46%
rise
to
$3,636
by
July
13,
2024.
Despite
this
positive
outlook,
the
market
sentiment
remains
bearish.
The
Fear
&
Greed
Index
stands
at
70
(Greed),
indicating
strong
investor
interest.


Related
Reading

Over
the
last
30
days,
Ethereum
has
shown
significant
volatility,
with
positive
gains
on
53%
of
the
days
and
an
overall
price
fluctuation
of
8.63%.
While
the
short-term
forecast
is
optimistic,
the
mixed
signals
highlight
the
need
for
cautious
investment
given
the
current
market
unpredictability.

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Featured
image
from
SignatureCare
Emergency
Center,
chart
from
TradingView

Go to Source
Author: Christian Encila


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