As a seasoned crypto investor with battle-hardened nerves and a portfolio that resembles a roller coaster ride, I can’t help but feel a mix of emotions when I see such market movements. The liquidations on Monday, particularly those of Ethereum traders on centralized exchanges, were a stark reminder of the wild, unpredictable nature of this digital frontier.
As an analyst, I observed a substantial setback for Ethereum traders on Monday, with approximately $17 million in liquidations, despite promising indicators of recovery within the wider crypto market. This liquidation wave was notably intense on centralized trading platforms like Binance, OKX, and Huobi Global (HTX), where numerous long-term traders were compelled to close their positions.
Based on information from the blockchain analysis platform CoinGlass, it appears that long traders suffered significant losses over the past day, losing almost $14 million. However, short sellers experienced relatively minimal losses, with around $3.2 million impacted within the same timeframe.
Liquidations amid Market Recovery
Despite a general revival in the crypto market following several weeks of steep drops, significant sell-offs persisted. As per CoinMarketCap’s data, the total global crypto market capitalization currently amounts to $2.24 trillion, with Bitcoin (BTC) making up over half of this figure.
In simple terms, Bitcoin, the most significant cryptocurrency in circulation, boasts a market value of approximately $1.26 trillion and controls around 56.30% of the overall market. Over the weekend, there was a robust recovery for BTC, which contributed to the stabilization of the crypto market following a substantial drop earlier in August. On Friday alone, Bitcoin surpassed the $60,000 mark and kept climbing to reach an impressive high of $64,000 on Monday, August 26th. At the moment of press, its value has slightly dipped to $63,857.
The recent surge in prices across the crypto market has also affected Ethereum, which is the second most valuable digital asset based on market capitalization. Last week alone, Ethereum saw an almost 5% growth, pushing its value up to around $2,800 as per CoinMarketCap records. This increase in value has generated optimism within the investment and trading community, with many now anticipating a prolonged upward trajectory for Ethereum’s price.
Sharp Ethereum Decline Triggers Liquidations
Contrary to the positive outlook, Ethereum traders faced a setback on Monday as the market took a turn against them. The digital currency saw an unexpected drop of around 0.5%, causing it to fall to $2,744. This seemingly minor decrease initiated automatic liquidations for traders with leveraged positions, leading to a chain reaction of forced sales and increasing losses.
Traders are worried because Ethereum hasn’t been able to sustain its upward movement as expected. The digital currency had been moving steadily upwards until August 23, when it experienced a sudden surge that temporarily boosted optimism about a breakout. However, since then, Ethereum has faced difficulties in maintaining crucial support points, leading to increased market instability.
Resistance Levels and Market Outlook
Analysis based on technical methods suggests that Ethereum may be encountering significant barriers at important points. At present, the Relative Strength Index (RSI), a tool used to gauge an asset’s price trend, is close to its centerline, suggesting that there isn’t much clear directional momentum in the market.
Moreover, Ethereum has yet to surpass the short-term moving average (represented by the yellow line) near the $2,900 mark. The long-term moving average (depicted as the blue line) offers another substantial resistance level around $3,200. In order for Ethereum to maintain a consistent bullish momentum, it must first conquer these hurdles.
For now, the value of Ethereum could keep changing inside its present limits, with investors exercising caution while maneuvering through this turbulent phase.
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2024-08-26 11:41