Ethereum
Ethereum’s $35M shakeup: How ETH’s 7% surge sparked a 2-month high
- The price of ETH appreciated by more than 5% on May 3
- This contributed to an increase in the number of short positions liquidated
Ethereum [ETH] A 7% rise in prices during the May 3 intraday trading session caused short liquidations on its derivatives market to rise to a two-month high, according to Change machine.
In fact, the on-chain data provider later revealed that $35 million worth of ETH short positions were liquidated that day. In comparison, long liquidations totaled just $7.16 million.
Source: Coinglass
Liquidations occur in an asset’s derivatives market when a trader’s position is forcibly closed due to insufficient funds to maintain it. Short liquidations occur when the value of an asset suddenly increases and traders who have open positions favoring a price decline are forced to exit their positions.
According to Santiment According to the data, the altcoin closed on May 3 above $3,000 after trading below that price level since the start of the month.
Derivatives market traders remain in control of their position
As of press time, still extending its gains, the price of ETH is up over 5% in the past 24 hours. At the time of writing, the market-leading altcoin was valued at $3,104.
Here, it is worth noting that Coinglass data also suggests that the price rise has not triggered any significant activity in the ETH derivatives market. In fact, trading volume in this market only increased by 2%.
Read Ethereum [ETH] Price prediction 2024-25
Likewise, the coin’s futures open interest saw a slight uptick of 3% during the same period. Open interest in ETH futures stood at $10.68 billion at press time. Furthermore, ETH options volume fell by more than 50% during the period under review.
Options trading grants participants the right to buy or sell an asset on a specified date. Typically, when ETH sees a decline in its options volume, it means there is less speculation about its future price movements as market participants wait to see where the coin’s market might head next .
A combined reading of the minor rise in ETH futures trading volume and decline in options volume suggests that derivatives market participants of the coin have taken a “wait and see” approach. Simply put, they are not betting significantly on where its price might go.