$510M Longs in Danger If Ether Repeats Last Weekend’s Volatility
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An Ether price drop of just 2.25% this weekend could result in over $500 million in long positions being liquidated.
Over half a billion dollars in Ether long positions could be at risk of liquidation if the cryptocurrency encounters the same volatility as last weekend.
This risk is compounded by growing concerns that the United States Securities and Exchange Commission (SEC) may reject spot Ether exchange-traded fund (ETF) applications in May.
At the time of reporting, Ether is trading at $3,140 according to CoinMarketCap.
In recent weekends, Ether’s price has seen quick fluctuations followed by recoveries to key support levels.On April 20, Ether briefly dipped 2.25% to $3,036.
A week earlier, on April 13, the price dropped nearly 9% to $2,950 before bouncing back to $3,075.
If a similar scenario occurs this weekend, a substantial amount of liquidations could be at risk. A 2.25% drop at the current price could trigger $510 million in long liquidations, according to CoinGlass data.
A sharper decline, such as the 9% drop from the previous weekend, would lead to $853 million in long liquidations.
The potential for a high volume of liquidations arises as Ethereum faces broader uncertainties related to the status of spot ETF applications and various legal challenges.
On April 24, it was reported that U.S. issuers and other firms expect the SEC to reject spot Ether ETF applications in May, following recent meetings with the regulator.
Four individuals who participated in these meetings stated that they felt the discussions were one-sided, with SEC staff not engaging in substantive discussions about the proposed products.
In a related development on April 25, software development company Consensys filed a lawsuit against the SEC and its five commissioners, alleging that the agency plans to regulate Ether (ETH) as a security.
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