Potential Liquidation Risk for Ethereum Longs Amid Weekend Volatility and Regulatory Uncertainty
The Ethereum (ETH) market is facing a potential crisis this weekend as over $500 million in long positions could be liquidated if the price experiences another major drop. Recent volatility in the ETH market has investors on edge, with sharp price swings becoming a recurring theme.
Last weekend, the price of ETH plunged by 2.5%, dropping to $3,036 and triggering liquidations for some long positions. An even steeper decline of 9% occurred on April 13, pushing the price down to $2,950 before a rebound. Currently, ETH is trading at $3,052, down 0.52% in the last 24 hours.
If a similar price swing occurs this coming weekend, liquidations could potentially exceed $853 million in the event of another 9% decline. Adding to the uncertainty is the potential rejection of spot Ethereum ETF applications by the US Securities and Exchange Commission (SEC) in May.
Several US issuers and firms anticipate that the SEC will reject the applications, leading to further regulatory uncertainty. Blockchain technology company Consensys has even filed a lawsuit against the SEC over its stance on potentially classifying ETH as a security.
The combination of potential weekend volatility and ongoing regulatory uncertainty is creating a tense atmosphere for Ethereum investors. With over half a billion dollars in longs at risk, this weekend could be a major moment for Ethereum investors and the altcoin market. Stay tuned for updates on this developing story.
