Data shows that a lot of long liquidations have piled up on exchanges after the Ethereum ETF approval, which was a sell-the-news event.
Ethereum Price Has Been Down Since Spot ETFs Gained Approval
Yesterday, the US Securities and Exchange Commission (SEC) finally gave the green light on all eight Ethereum spot exchange-traded funds (ETFs) that were awaiting approval.
Spot ETFs are basically investment vehicles that provide a way to gain indirect exposure to ETH’s price movements without actually owning any tokens.
ETFs are available through means that traditional investors would be familiar with, so those who don’t want to bother with cryptocurrency exchanges and wallets could decide to invest in the asset through them.
The market had been anticipating this event, just like the Bitcoin spot ETF approval back in January. In BTC’s case, the inflows through the ETFs eventually fueled a rally towards a new all-time high (ATH).
When the Bitcoin ETFs had just been approved, though, the investors initially showed a selling reaction, which resulted in the cryptocurrency registering a significant drawdown.
It would appear that the Ethereum spot ETF approval has also been met with some selling so far, as coins across the sector have been in the red over the past 24 hours. Ethereum itself is down more than 5% in the window.
Despite the decline, Ethereum investors would still be holding notable profits, as the coin at its current price of $3,700 is still up over 23% in the past week.
It would appear that the approval and the subsequent selloff may have caught the market off-guard, as the derivatives side has registered some large liquidations in the last 24 hours.
$384 Million In Cryptocurrency Contracts Found Liquidation In Past Day
According to data from CoinGlass, the cryptocurrency derivatives market has observed a mass flush during the past day. The below table shows what the numbers have looked like.
As is visible, over $384 million in cryptocurrency contracts have seen forceful closure during this period. More than $297 million of these liquidations involved the long holders alone.
This means these investors betting on a bullish outcome made up 77% of the flush. This naturally lines up, as the overall price volatility in the past day has been towards the downside.
It’s also not surprising that Ethereum, which has been the focus of attention recently, contributed the largest share to this liquidation squeeze, as the heatmap below reveals.
At more than $150 million liquidations, Ethereum has managed to significantly outdo Bitcoin, which has seen contracts worth $74 million flushed down.
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