Ethereum (ETH) Skyrockets to a 2-Month High with a $35 Million Boost: The Impact of a 7% Surge

  • Ethereum (ETH) experienced a significant price increase of over 5% on May 3, leading to a surge in liquidated short positions.
  • Despite this price rally, ETH’s derivatives market saw a decline in activity, indicating a shift in trader strategy.
  • On-chain data suggests that $35 million worth of ETH’s short positions were liquidated on May 3.

Ethereum’s price rally on May 3 led to a surge in liquidated short positions, however, the derivatives market saw a decline in activity, indicating a shift in trader strategy.

Ethereum’s Price Rally and Its Impact

On May 3, Ethereum’s price appreciated by over 5%, causing a significant increase in the number of short positions liquidated. According to on-chain data provider Coinglass, $35 million worth of ETH’s short positions were liquidated on that day. In comparison, long liquidations totalled just $7.16 million. Liquidations occur in an asset’s derivatives market when a trader’s position is forcefully closed due to insufficient funds to maintain it. Short liquidations occur when the value of an asset suddenly rises, forcing traders who have open positions in favor of a price decline to exit their positions.

Decline in Derivatives Market Activity

Despite the price rally, ETH’s derivatives market saw a decline in activity. Trading volume in that market grew by just 2%, according to Coinglass data. Similarly, the coin’s Futures open interest recorded a minor 3% hike over the same period. ETH’s Futures open interest was $10.68 billion at press time. Furthermore, ETH’s Options volume cratered by over 50% during the period under review. A combined reading of the minor hike in ETH’s Futures trading volume and its declining Options volume suggests that the coin’s derivatives market participants have adopted a “wait and see” approach, not placing significant bets on where its price might head next.

Conclusion

The recent price rally of Ethereum led to a surge in liquidated short positions. However, the derivatives market saw a decline in activity, suggesting a shift in trader strategy. As the market continues to evolve, it remains to be seen how these trends will develop and what impact they will have on Ethereum’s future performance.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.

BREAKING NEWS

Binance Expands Compliance Team by 34% to Strengthen Financial Regulations

On November 22, COINOTAG News reported that Binance is...

Galaxy Digital CEO: Trump Administration Sparks Paradigm Shift for Bitcoin Regulation

In a recent statement, Michael Novogratz, CEO of Galaxy...

Stacks Founder Muneeb Ali Unveils Bitcoin Layer2 Integration with Coinflip for Enhanced sBTC Transactions

On November 22, Stacks founder Muneeb Ali revealed via...

Interactive Strength to Invest $5 Million in Bitcoin Amid Growing Institutional Interest

On November 22, COINOTAG News reported that Interactive Strength,...

Manifold Trading Rakes in $27.87 Million Profit from OM Investments

On November 22nd, COINOTAG News reported on significant trading...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img