Crypto traders should remain vigilant for an ether (Eth) The drop in prices less than $ 4,200, which could trigger millions of long liquidations and increase market volatility.
During the editorial staff, more than 56,638 ETH in long uphill positions – worth 236 million dollars – risked risk of liquidation on the decentralized perpetual exchange hyperliquid in the event of a drop in ether price to $ 4,170, according to Hyperdash data.
Data has also shown a risk of significant liquidation at $ 2,150 at $ 2,160 and $ 3,940. At the time of the press, Ether changed hands at $ 4,260, down almost 5% on the day, according to Coindesk data.
Andrew Kang, founder of Capital Capital Capital Capital Méchanism Capital, said on X that large long liquidations could potentially lower ether prices to $ 3,600.
“”[I] Consider that we are about to reach $ 5 billion in ETH liquidation through exchanges, dropping $ 3.2,000 – $ 3.6,000, “Kang said.
The liquidations, or the forced closure of leverages, occur when the position of a merchant is below the margin requirements set by the scholarship.
The margin shortage generally occurs when the market moves in relation to the merchant’s position, which means that the equity of their account fall below the minimum maintenance margin. This encourages the exchange to automatically conclude the position to avoid other losses and to ensure that the funds borrowed are recovered.
Largely long liquidations cause a sudden increase in sales pressure, which makes lower prices, creating a cascade effect which can trigger additional liquidations. This negative feedback loop is amplifying market volatility.
Read more: Dogecoin sellers control while Monero Attacker vote to target Doge; Bitcoin below $ 116,000
