In the midst of the recent surge in Bitcoin and Ethereum prices, short-term traders have faced significant liquidations. Within just 24 hours, more than $330 million was liquidated from the crypto market, with the majority of these coming from short traders anticipating a price decline. Coinglass data reveals that over 78,000 crypto traders experienced liquidations during this period, resulting in substantial financial losses.
Out of the total liquidation amount, a staggering 81.42% belonged to short traders, totaling $268.76 million. In contrast, long traders only accounted for $61.31 million in liquidations. This disproportional distribution indicates the heavy presence of short positions in the market and the corresponding losses incurred by these traders.
Interestingly, Ethereum took the lead in liquidations this time, surpassing Bitcoin. The substantial price increase of over 20% within 24 hours contributed to Ethereum liquidations amounting to $105.13 million. On the other hand, Bitcoin experienced $96.53 million in liquidations, with the majority originating from short positions similar to Ethereum.
The recent market rally, driven primarily by Ethereum and with support from Bitcoin, was influenced by regulatory developments. The United States Securities and Exchange Commission (SEC) requested exchanges to update their 19b-4 filings, crucial for the approval of Spot ETFs. This led to a positive market sentiment as expectations for Spot Ethereum ETF approval grew.
Following the regulatory updates, Bloomberg analysts James Seyffart and Eric Balchunas adjusted their approval odds for the funds from 25% to 75%. This revision, coupled with the anticipation of Spot Ethereum ETF approval, propelled the price of Ethereum from $3,100 to over $3,700. Bitcoin also surged past $71,000 during this period, marking one of the most successful days for the crypto market in 2024.
The recent surge in Bitcoin and Ethereum prices has had a profound impact on crypto traders, particularly short traders who faced significant liquidations. The dominance of short positions, the shift in leading cryptocurrency for liquidations, and the influence of regulatory developments highlight the volatility and unpredictability of the crypto market. Moving forward, traders must navigate these challenges and stay informed about market trends and regulatory updates to make informed decisions.