Ethereum Classic

Over $41 Million Of Ethereum Longs Liquidated, Reaching A New 4-Week High


Over $41 million of ETH long positions have been liquidated as Ethereum prices flash crash from their April peaks, Coinglass data on April 19 reveals.

Ethereum Remains Volatile

ETH, the native cryptocurrency of the Ethereum network, is under immense pressure when writing. Although the uptrend remains, and the coin has generally posted impressive results over the last four months, the price drop today has led to the biggest liquidation of ETH long positions in over one month.

According to Coinglass data, ETH long positions were also wrecked on March 22 when over $31 million were forcefully closed. On average, less than $10 million of ETH longs have been closed on other trading days in the last month. 

ETH Total Liquidations: Coinglass

The magnitude of long or short liquidation can be used to measure general volatility in the market. Volatility indicates how fast or slow an asset price moves within a given period. 

Depending on the general liquidity, asset prices can move at different paces. In crypto, the most liquid assets, like Bitcoin and Ethereum, are usually less volatile than altcoins, for example, those outside the top 50.

$41 Million Of ETH Longs Liquidated

From the $41 million ETH longs liquidated, a big chunk is in OKX and Binance. These are some of the world’s largest cryptocurrency exchanges that support the derivatives trading of crypto assets. 

By supporting margin, perpetual futures, and other derivatives, OKX and Binance traders can use leverage to trade bigger positions than they would ordinarily be able to. Although leverage can amplify gains, it risks the trader’s account when prices move against their prediction. 

The drop of ETH prices from $2,100 moved against leverage traders in, among other platforms, Binance and OKX, leading to tens of millions of dollars being liquidated.

Ethereum Price On April 19| Source: ETHUSDT On Binance, TradingView
Ethereum Price On April 19| Source: ETHUSDT On Binance, TradingView

By liquidating a position, the exchange forcefully closed the long position and secured the margin since it couldn’t cover the ongoing loss. How quickly a position can be liquidated also depends on the leverage level. Traders with high leverage and trading bigger positions in a volatile market stand a higher risk of having their positions liquidated. 

The sharp spike in ETH long liquidations is less than a week after $54 million of short positions were liquidated on April 14. The number of ETH shorts closed by the exchange was also the largest in over a month. As the trend observed, most of those short positions were from Binance and OKX. There were also more short positions closed on Bybit and Deribit.

Feature Image From Canva, Chart From TradingView

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