Ether Liquidations Spike Amid Volatility Surrounding SEC ETF Application Approval

Ether (ETH), the native cryptocurrency of the Ethereum blockchain, remains in focus Friday morning after the world’s second largest cryptocurrency by market capitalization saw a spike in liquidations before and after the U.S. Securities and Exchange Commission (SEC) late Thursday approved applications for the listing of eight spot Ether exchange-traded funds (ETFs).

According to data from derivatives analysis platform CoinGlass, total Ether liquidations over the past 24 hours have tallied more than $150 million as volatile price swings on either side of the SEC’s application approval caught leveraged traders off guard. Interestingly, nearly 70% of those liquidations occurred on the long side of the market, meaning Ether positions that had anticipated rising prices. In the lead-up to the decision, the cryptocurrency’s price dropped suddenly to around $3,500 before surging over $3,800 minutes after the approval.

Liquidations occur in derivatives trading when a broker forcibly closes a position due to insufficient margin or capital in an investor’s account to cover potential losses, usually caused by heightened price fluctuations, such at Ether’s price swings on Thursday.

More broadly, total crypto liquidations have nudged towards $400 million over the past 24 hours — their highest level since May 1, with the SEC’s Ether application approval sparking increased volatility across the entire asset class as investors consider what the decision means for other digital assets.

Monitor These Key Levels Amid Ongoing Volatility

After topping out above the key $4,000 level in early March, Ether’s price traded within a falling wedge for several months before staging an impressive 19% breakout earlier this week as speculation mounted that the SEC could unexpectedly approve applications for spot Ether ETFs. Since Monday’s wide-ranging day, the price has remained volatile on above-average trading volumes.

Looking ahead, if Ether’s price continues to move higher, monitor the March 12 high at $4,093.88 as a potential area of resistance. A convincing breakout above this level could see Ether revisit its record high set at $4,867.81 in November 2021.

Conversely, on the downside, keep an eye on the $3,150 level, an area on the chart that finds support from both the wedge’s breakout point and 50-day moving average.

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As of the date this article was written, the author does not own any of the above securities.