$510M is at risk if Ether repeats last weekend’s volatility
More than half a billion dollars worth of Ether (ETH) long positions could face liquidation if Ether experiences the same price volatility as last weekend.
This comes amid concerns that the US Securities and Exchange Commission (SEC) may reject Ether exchange-traded fund (ETF) applications in May.
According to CoinMarketCap data, Ether is currently trading at $3,134 at the time of publication.
Over the past few weekends, Ether has experienced brief bursts in price, followed by a quick recovery to key support levels.
On April 20, the price briefly fell by 2.25% to $3,036. Last Saturday, April 13, it fell 9% to $2,950 before recovering to $3,075.
If it happens again this weekend, a large amount of liquid will be at risk. At current prices, a similar drop of 2.25% would result in a long liquidation of about $510 million, according to CoinGlass data.
Meanwhile, a steep drop similar to last weekend's 9% drop would wipe out $853 million in long-term liquidity.
Ethereum is facing widespread uncertainty about the status of spot ETF applications, along with other legal challenges, which could result in significant liquidity outflows.
Related: Ethereum price data shows strong resistance at $3.5K
On April 24, Cointelegraph reported that US issuers and other companies expect the SEC to reject Ether ETF applications in May after meetings with the regulator in recent weeks, citing four people who participated in the meetings.
The four people said recent meetings between the issuers and the SEC were one-sided and agency staff did not discuss the actual details of the proposed products.
Meanwhile, on April 25, software development company Consensus filed a lawsuit against the SEC and its five commissioners for “planning to regulate ETH as a security.”
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This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
