We would rather not see the decline of the crypto market happen, but for some the recent crash hit it very hard. An unknown trader was optimistic about the crypto price and decided to go long on ethereum (ETH) at the worst time. The trader lost nearly $55 million in a single trade because of his move.
Ethereum fell from nearly $1,800 to below $1,597 on the evening of Thursday and Friday. The local low point was short-lived. Meanwhile, the ETH price is already at $1,685 at the time of writing.
The trader closed his position on the crypto exchange Binance against Binance USD (BUSD). It was a gigantic number of almost 39,000 ethereum. The action represented nearly 30% of all liquidated futures on the exchange with its investment. Its size also makes it seem more likely to be a large company than a single person.
Long squeeze causes sales response
It is speculated that the long positions were liquidated by a so-called long squeeze event. A “long squeeze” refers to a financial market scenario in which investors who have long positions are forced to close or sell their positions. This forced sale may further accelerate the fall in the asset’s price, putting more long investors in a similar situation. In a short time, this creates a chain reaction of sales.
Ethereum futures ETFs are coming
US companies such as Bitwise, VanEck, Valkyrie and Volatility Shares are submitting applications for Ethereum futures exchange traded funds (ETFs), despite previous rejections for similar proposals. With increasing interest in mock Bitcoin ETFs, such as Blackrock’s, the door now seems open for Ethereum. Ethereum futures ETFs differ from pending Bitcoin ETF applications by focusing on futures: contracts that allow the purchase or sale of ETH at a set price. Valkyrie is estimated to have initial approval in October.
2023-08-19 19:04:08
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