As a researcher with a background in financial markets and experience in following the cryptocurrency space, I find the current situation surrounding Ethereum (ETH) quite intriguing. The potential for massive long liquidations due to price volatility is a significant concern, especially amid growing uncertainties regarding the SEC’s stance on Ether spot Exchange Traded Funds (ETFs).
Approximately 500 million dollars’ value of Ether long positions might be at risk of being closed out if Ether undergoes another price swing similar to what occurred last weekend.
I’ve noticed growing apprehension surrounding the SEC’s potential rejection of an Ether spot ETF in the upcoming month.
At the time of publication, Ether is currently trading at $3,134, as per CoinMarketCap data.
In recent weekends, Ether’s price has seen brief periods of heightened volatility, only to bounce back and reclaim important support levels.
On the 20th of April, the price momentarily dropped by 2.25%, landing at $3,036. A week prior, on the 13th of April, there was a significant decrease of almost 9%, causing the price to plummet to $2,950. However, it bounced back and rose to $3,075 by the end of the weekend.
Should the same occurrence take place over the upcoming weekend, a substantial number of positions could potentially be liquidated. Based on present figures from CoinGlass, a mere 2.25% decrease in price would trigger approximately $510 million worth of long liquidations.
During this timeframe, a decrease as steep as the 9% reduction experienced the preceding weekend would lead to approximately $853 million being erased through long liquidations.
As Ethereum faces a large number of potential sell-offs, it contends with broader doubts surrounding the approval of its spot Exchange-Traded Fund (ETF), in addition to other legal issues.
According to a report by CryptoMoon on April 24, industry sources anticipate that the SEC will likely reject upcoming Ether spot ETF proposals in May based on information shared from recent discussions with regulatory officials, as revealed by four individuals involved in those meetings.
As an analyst, I’ve noticed a concern raised by four individuals regarding their recent interactions with the SEC. They claim that these encounters have been biased in favor of the issuers, with little to no substantive discussion about the proposed products taking place during these meetings.
On Thursdays, it came to light that Consensys, a software development firm, initiated a legal action against the Securities and Exchange Commission (SEC) and its five commissioners. The reason for the lawsuit is their alleged intention to classify Ethereum (ETH) as a security for regulatory purposes.
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2024-04-26 10:09