Ethereum has been in recovery mode since developers announced a possible date for the merger. As that date is near, it has generated a lot of positive sentiment from community members looking forward to the leading smart contracts platform moving to Proof of Stake. This rebound has since sparked a liquidation event that has not slowed in any way as nearly 90,000 traders watched their positions liquidate.
Ethereum liquidations are on the rise
The recent recovery trend has seen Ethereum price surge above $1,400 to a fresh monthly high. As a result, he has left a trail of blood consisting mostly of short traders’ positions. These traders had bet against the digital asset’s ability to recover and are now suffering as it has surpassed all expectations.
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In the last 24 hours, Ethereum has seen the largest liquidations of any cryptocurrency. This is because the asset’s recovery was one of the most significant during this period. Data from Coinglass shows that ETH traders have seen more than $230 million in liquidations, most of which were short traders.
Liquidations soar | Source: coin jar
The entire crypto market has hit almost $400 million in liquidations in the last day at the time of writing. A total of 86,525 traders were liquidated, with the largest single liquidation occurring in the ETH-PERP pair on the FTX crypto exchange.
ETH does not stop
Ethereum price is preparing to test an incredibly important price level at the time of writing. The cryptocurrency has now consolidated its position above its 20-day moving average and the next stop lies at $1,500, although significant resistance is developing at this level.
ETH price recovers above $1,400 | Source: ETHUSD on TradingView.com
Testing $1,500 is important for Ethereum for two reasons. Not only is this the biggest resistance in its campaign to $1,700, it is also a test of the digital asset’s ability to break the 50-day hurdle. Staying above this point is important for ETH if it wants to continue its bullish rally.
Related Reading | Short liquidations rise as bitcoin recovers above $20,000
Ethereum’s recovery is also helping turn selling sentiment, albeit short-term. Longer term, the digital asset would need to hold $1,500 and flip that resistance point to a support level. Otherwise, its hold at $1,400 remains shaky.
Featured image from Analytics Insight, chart from TradingView.com
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