Data shows that many long liquidations accumulated on exchanges after the approval of the Ethereum ETF, which was a news selling event.
Ethereum price has fallen since spot ETFs were approved
Yesterday, the United States Securities and Exchange Commission (SEC) finally gave the green light on the eight Ethereum spot exchange-traded funds (ETFs) awaiting approval.
Spot ETFs are essentially investment vehicles that allow you to gain indirect exposure to the price movements of ETH without actually owning tokens.
ETFs are available through means that traditional investors are familiar with, so those who don’t want to bother with cryptocurrency exchanges and wallets might decide to invest in the asset through them.
The market anticipated this event, as did the approval of the Bitcoin spot ETF in January. In the case of BTC, inflows via ETFs ultimately fueled a rally to a new all-time high (ATH).
However, when Bitcoin ETFs were just approved, investors initially showed a selling reaction, which caused the cryptocurrency to drop significantly.
It would appear that the approval of the Ethereum spot ETF has also resulted in some selling so far, as coins in the sector have been in the red over the past 24 hours. Ethereum itself is down over 5% in the window.
The price of the asset appears to have shot up over the last few days | Source: ETHUSD on TradingView
Despite the drop, Ethereum investors would still make notable profits as the coin, at its current price of $3,700, is still up over 23% over the past week.
It appears that the approval and subsequent sell-off may have taken the market by surprise, as the derivatives side has recorded some significant liquidations in the last 24 hours.
$384 million worth of cryptocurrency contracts liquidated in the past day
According to data from CoinGlass, the cryptocurrency derivatives market has observed a massive chase over the past day. The table below shows what the numbers look like.
The data for the cryptocurrency-related liquidations over the last 24 hours | Source: CoinGlass
As can be seen, over $384 million worth of cryptocurrency contracts were forcibly closed during this period. More than $297 million of these liquidations concerned the long holders alone.
This means that those investors betting on a bullish outcome represented 77% of the suit. This fits naturally, as overall price volatility over the past day has been on the downside.
It’s also no surprise that Ethereum, which has been the focus of recent attention, contributed the largest share to this selloff, as the heat map below reveals.
Looks like ETH liquidations have been more than double that of BTC's | Source: CoinGlass
With over $150 million in liquidations, Ethereum managed to far outpace Bitcoin, which saw contracts worth $74 million liquidated.
Featured image of Kanchanara on Unsplash.com, CoinGlass.com, chart from TradingView.com
