The general crypto market has seen some positive price rally in 24 hours. Many of the coins are trading in greens, including Ethereum with its 7.86% gains and Bitcoin with a 2.89% surge.
Other altcoins such as PancakeSwap CAKE, SHIB, Ethereum Classic ETC, and Tether USDT are also in the greens. For instance, CAKE gained 3.6%, SHIB soared by 1.56%, while ETC recorded a good 8.38 price growth.
Currently, the ETH price is at $1,635 while the BTC price stands at $19304. Before the close of the market today, September 8, we might see more bullish support for the top cryptos and the altcoins too. But the recent price increase in Ether has spiked liquidations.
Ethereum Price Growth Increases Liquidations
Due to the price increase seen in ETH price, many of its leveraged positions are being liquidated. According to Coinglass, the total liquidations have reached close to $200 million in 24 hours.
ETH positions were more than $110 million out of the total liquidated positions. Notably, the largest order was a BTCUSD perpetual position worth $2 million. This liquidation took place on Bybit.
Other exchanges with high liquidations figures include OKEx, Binance, ByBit, FTX, CoinEX, Huobi, Bitmex, etc. OKEX recorded up to 75% short positions liquidations amounting to $4.28 million, while Binance followed closely 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.
Ethereum’s price currently trades above $1,650. | Source: ETHUSD price chart from TradingView.com
What Could Be Pushing Liquidations
The Ethereum community is set to embrace the upcoming upgrade to a proof of stake mechanism. Even as the Merge approaches, the coin price keeps fluctuating. There is a more positive outlook today, but the past days have not been too convincing.
For instance, the ETH price fluctuated between $1533 and $1577 from August 30 to September 5. It saw a little push above that mark on September 6, but that was the day of the Bellatrix upgrade. After the rally, it pulled back to $1560 the next day, September 7 but closed the market with $1629.
With these price fluctuations, it’s not surprising that liquidations are currently pushing their limits in the markets. Most traders are not able to hold their positions, and the exchanges are closing them.
A Brief on Liquidation
Liquidation occurs when crypto exchanges close a trader’s leveraged position due to losses in the initial margin. This is one reason traders are advised to go easy on leverage. If the value of the crypto asset plummets, they could lose their own little investment capital.
Given the recent uncertainty in crypto prices, including Ethereum, it’s obvious that these leveraged positions are no longer sustainable. Some traders that can be spared from this trend are those who placed a “stop order” on their positions.
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But the likelihood of losing their funds during this period is very high for those who didn’t. Unless, of course, the Merge reverses the price trend.
Featured image from Pixabay and chart from TradingView.com