The general crypto market has seen some positive price rally in 24 hours. Many of the coins are trading in the green, including Ethereum with gains of 7.86% and Bitcoin with a gain of 2.89%.
Other altcoins like PancakeSwap CAKE, SHIB, Ethereum Classic ETC and Tether USDT are also in the green. For example, CAKE gained 3.6%, SHIB increased by 1.56%, while ETC registered a good price increase of 8.38.
Related Reading: Central Bank Chairs Push Bitcoin Price Down, Will BTC Bounce Again?
Currently, the ETH price is at $1,635 while the BTC price it amounts to $19304. Before the market closes today, September 8, we may see more bullish support for the top cryptocurrencies and altcoins as well. But the recent surge in the price of Ether has sparked liquidations.
Rising Ethereum prices increase liquidations
Due to the price increase seen in the price of ETH, many of its leveraged positions are being liquidated. According to Coinglass, total liquidations have reached close to $200 million in 24 hours.
ETH positions were over $110 million of total liquidated positions. In particular, the largest order was a $2 million BTCUSD standing position. This clearing was done on Bybit.
Other exchanges with high liquidation rates include OKEx, Binance, ByBit, FTX, CoinEX, Huobi, Bitmex, etc. OKEX recorded liquidations of up to 75% of negative positions amounting to $4.28 million, while Binance followed closely behind with $3.36 million in total liquidations.
ByBit, FTX, CoinEX, Huobi and Bitmex recorded $3.16M, $1.39M, $447.91K, $321.57K and $20.73K.
What could be the clearance push
The Ethereum community is set to embrace the upcoming upgrade to a proof-of-stake mechanism. Even as the merger approaches, the price of the coin continues to fluctuate. There is a more positive outlook today, but the previous days were not very convincing.
For example, the price of ETH fluctuated between $1533 and $1577 from August 30th to September 5th. She was seeing a small push above that limit on September 6th, but that was the day of Bellatrix’s upgrade. After the rally, it retreated to $1560 the next day, September 7, but closed the market at $1629.
With these price fluctuations, it is not surprising that liquidations are currently exceeding their limits in the markets. Most traders are unable to hold their positions and exchanges close them out.
Liquidation occurs when crypto exchanges close out a trader’s leveraged position due to initial margin losses. This is one reason why investors are advised to be lightly leveraged. If the value of the crypto asset plummets, they could lose their own small investment capital.
Given the recent uncertainty in cryptocurrency prices, including Ethereum, it is evident that these leveraged positions are no longer sustainable. Some traders who can escape this trend are those who put a “stop order” on their positions.
Related reading: 20% slide possible this month
But the probability of losing their money during this period is very high for those who didn’t. Unless, of course, the Merger reverses the price trend.
Featured image from Pixabay and chart from TradingView.com