Key Points
- Ethereum traders experienced $17 million in liquidations on Monday, particularly on centralized exchanges.
- Despite market recovery, Ethereum’s price dropped, triggering automatic liquidations for leveraged positions.
Ethereum traders faced substantial losses on Monday, with around $17 million liquidated. This occurred despite the broader cryptocurrency market showing signs of recovery. Centralized exchanges such as Binance, OKX, and Huobi Global (HTX) were the most affected, with many long traders compelled to close positions.
Data from CoinGlass, a blockchain analytics platform, indicates that long traders were the most impacted, with nearly $14 million wiped out in just 24 hours. Conversely, short sellers had fewer liquidations, with roughly $3.2 million affected during the same timeframe.
Market Recovery and Liquidations
These heavy liquidations happened even though the overall crypto market was bouncing back after weeks of sharp declines. CoinMarketCap data shows that the global crypto market capitalization currently sits at $2.24 trillion, with Bitcoin (BTC) accounting for more than half of this value.
Bitcoin, the industry’s leading crypto asset, has a market cap of $1.26 trillion and holds a 56.30% market dominance. Over the weekend, BTC saw a strong resurgence, helping stabilize the broader crypto market after experiencing significant dips earlier in the month. On Friday, Bitcoin reclaimed the $60,000 level and continued its upward momentum to peak at $64,000 on Monday, August 26. However, it has slightly declined to $63,857 at the time of this report.
This positive price movement impacted the entire crypto market, including Ethereum, the second-largest digital asset by market capitalization. Last week, Ethereum posted a nearly 5% increase, reaching $2,800, according to CoinMarketCap data. This recovery ignited optimism among investors and traders, raising hopes of a sustained upward trend.
Ethereum’s Decline and Liquidations
Despite this optimism, the market turned against Ethereum traders on Monday. The digital asset experienced a sudden decline of approximately 0.5%, dropping to $2,744. This seemingly small dip was enough to trigger automatic liquidations for traders with leveraged positions, leading to a wave of forced sales and mounting losses.
Ethereum’s inability to maintain its upward momentum has caused concern among traders. The digital asset had shown a relatively steady trend until a sharp spike on August 23, which briefly raised hopes of a breakout. However, since then, Ethereum has struggled to hold onto key support levels, leading to further market volatility.
Resistance Levels and Market Outlook
Technical analysis indicates that Ethereum is facing strong resistance at crucial levels. The Relative Strength Index (RSI), which measures the asset’s price momentum, is currently hovering around its neutral line, indicating a lack of clear directional momentum in the market.
Additionally, Ethereum has failed to break through the short-moving average (yellow line), which is positioned around $2,900. The long-moving average (blue line), another significant resistance level, stands around $3,200. For Ethereum to establish a sustained bullish trend, it would need to overcome these barriers.
Until then, Ethereum price may continue to fluctuate within its current range, with traders remaining cautious as they navigate this volatile period.
