Ethereum Investors See Red After Spot ETF Approval
The recent approval by the US Securities and Exchange Commission of eight Ethereum spot exchange-traded funds (ETFs) has caused a stir in the market. While this news was highly anticipated, similar to the approval of Bitcoin spot ETFs earlier this year, the reaction has been mixed.
Investors initially reacted with selling following the Ethereum spot ETF approval, causing a dip in the price of Ethereum and other cryptocurrencies. This approval allows investors to gain exposure to Ethereum’s price movements indirectly without owning the tokens themselves through traditional investment vehicles.
Market Reaction to Ethereum Spot ETF Approval
- Investors anticipated the approval, similar to the reaction to Bitcoin spot ETF approval earlier this year
- Selling pressure observed across the crypto sector following the news
- Ethereum down more than 5% in the past 24 hours
Impact on Ethereum Price
- Ethereum investors still holding significant profits despite the recent decline
- Current price of Ethereum at $3,700, up over 23% in the past week
- Approval followed by a market selloff triggering large liquidations
Significant Liquidations in Cryptocurrency Derivatives Market
Following the approval of Ethereum spot ETFs, the cryptocurrency derivatives market has seen a wave of liquidations in the past 24 hours. Data from CoinGlass reveals a substantial amount of contracts forced to close during this period.
According to the data:
Massive Flush in Cryptocurrency Contracts
- Over $384 million in cryptocurrency contracts liquidated in the past day
- Long holders account for more than $297 million of these liquidations
- Bullish investors make up 77% of the overall liquidations
Impact on Ethereum and Bitcoin
- Ethereum contributed the largest share to the liquidation squeeze, surpassing Bitcoin
- Ethereum saw liquidations totaling over $150 million compared to Bitcoin’s $74 million
Hot Take: Long Liquidations Surge After Ethereum ETF Approval
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. This event has triggered significant selling pressure in the market, leading to a dip in Ethereum’s price and causing large liquidations in the cryptocurrency derivatives market.
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