- ETH’s long traders have witnessed significant liquidations in the past 24 hours.
The coin’s options volume and Open Interest have also declined.
As an experienced analyst, I’m closely monitoring the Ethereum [ETH] market following the significant long liquidations and declining derivatives market activity over the past 24 hours. The spike in long liquidations on June 11th, with a total of $62 million, was the highest since May 23rd, according to Coinglass data. This is a clear indication that traders holding long positions were forced to exit due to unexpected price drops.
Ethereum [ETH] witnessed a spike in long liquidations on the 11th of June, according to Coinglass.
As a market analyst, I examined the data provided by the derivatives market and discovered that the long liquidations of the altcoin on that specific day marked the most significant figure since May 23rd.
When a trader in the derivatives market of an asset doesn’t have enough money to cover their obligations, their position is forcibly terminated through a process called liquidation.
When the value of an asset suddenly and dramatically decreases, causing surprise among traders, those who had bet on a price increase are compelled to sell their holdings in what is known as prolonged liquidations.
On June 11th, a total of $62 million worth of long positions in Ethereum were liquidated, compared to $7.3 million in short positions that were liquidated.
Decline in ETH’s derivatives market
In the last 24 hours, there’s been a noticeable decrease in trading activity in Ethereum’s derivatives market. Specifically, the total volume of options trades for Ethereum has fallen by approximately 52%.
During that period, options trading volume totaled $321 million.
A decline in an options trading volume suggests fewer participants are buying or selling options.
As a researcher studying the behavior of options markets, I have observed that a decrease in the number of trades completed in an asset’s options market can lead to less liquidity. Consequently, this situation typically results in wider bid-ask spreads for options contracts. Subsequently, executing trades at preferred prices may become more challenging for market participants.
Further, the Open Interest for the coin stands at approximately $15.73 billion as of now. This represents a decrease of about 2% compared to the previous review period.
The Open Interest of an asset represents the current count of open contracts or positions that have yet to be liquidated. A decrease in Open Interest implies that some traders are closing their existing positions without establishing new ones.
Despite the recent dip in Ethereum’s price causing widespread liquidations and decreased options trading activity, I’ve noticed that Ethereum’s Funding Rates have stayed positively charged on various crypto exchanges.
As a financial analyst, I’d like to point out that at the current moment, the Ethereum futures market’s funding rate stands at 0.0069%. For some perspective, the last occasion when this rate turned negative was on May 3rd.
In the context of perpetual futures contracts, Funding Rates function as adjustments to maintain the contract’s price aligned with the current market price or “spot price.”
Read Ethereum’s [ETH] Price Prediction 2024-25
When an asset’s Funding Rate is positive, it suggests a strong demand for long positions.
In simpler terms, this indicates that a larger number of traders are acquiring the coin with the intention of later selling it for a profit, as opposed to those who are buying it in preparation for a price decrease.
Read More
- SQR PREDICTION. SQR cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- DOP PREDICTION. DOP cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- SAGA PREDICTION. SAGA cryptocurrency
- T PREDICTION. T cryptocurrency
- XLM vs. XRP: Which One is Better, Stellar Lumens or Ripple?
- SEILOR PREDICTION. SEILOR cryptocurrency
- Miners ‘punishing’ Bitcoin? Analysts point fingers as BTC slides below $66K
- CELL PREDICTION. CELL cryptocurrency
2024-06-13 03:03