In the past 24 hours, Bitcoin (BTC) and Ethereum (ETH) have lost key levels of support due to weakening sentiment for the crypto market at large. As of such, over $520 million of cryptocurrency has been liquidated. This comes in tandem with a massive bearish run that saw traders of ETH futures experience liquidations nearly double those of BTC, in an unusual market trend. This data was shown in a recent liquidation data from Coinglass.
ETH-tracked futures lost more than $236 million, nearly twice the $125 million lost on bitcoin futures. What is unusual is that these losses were unusual for ETH, which mostly sees lower liquidations than bitcoin on average trading days. In another similar event, the futures of Stepn’s GMT tokens racked up $23 million in losses amid headwinds from Chinese authorities, who banned gameplay of the popular “step-to-earn” protocol in the country. Futures on Solana (SOL) lost $11 million, while metaverse-focused Sandbox (SAND) saw $9 million in losses.
In Asia, during the early hours of Friday, ETH dropped to as low as $1,728, losing about 9% of its value in 24 hours. This unexpected dip to similar price levels on Thursday night was promptly brought up by traders, but this morning’s decline was gradual. Price charts suggest support at current levels and resistance at $1,900, which acted as pivotal support earlier this month. Although similar prices were previously seen in July 2021, losing this level could mean that ETH could hypothetically drop to the $1,300 – $1,500 range or lower.
The drop of the price of ETH could be due to the lack of demand for Ethereum’s block space, as per data from analytics firm, Glassnode. Block space is the amount of transactional data that can be included in each block, with users paying fees. This lack of demand is evident in the dropping of the “Gas” or network fees of Ethereum since December last year. Glassnode confirmed in a note earlier this week that Ethereum’s gas fees have reached a multi-year low.
In a Twitter message, analytics firm Coinalyze said that a sudden increase succeeded Thursday’s day volatility in open interest on ETH futures. Although ETH and other major cryptocurrencies seemed to be stabilizing at the time of writing, futures and options data for bitcoin suggests that traders are positioning for a bearish period ahead.
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