Cryptocurrency markets underwent significant volatility on Thursday as traders anxiously awaited a regulatory decision regarding spot-based ether exchange-traded funds (ETFs) in the United States.
In a tense hour leading up to the eventual approval, the price of ETH experienced sharp fluctuations, initially dropping to $3,500 around the time of traditional U.S. market closing, then rallying to nearly $3,900 upon unconfirmed reports of approval before settling above $3,800 following confirmation.
Bitcoin (BTC) also witnessed a tumultuous episode, dipping to the low-$66,000s before surging to $68,300, only to retreat below $68,000. However, ETH displayed relative strength, registering a 1.5% increase over the past 24 hours, while BTC recorded a nearly 3% decline during the same period. The CoinDesk 20 Index, reflecting the broader market, declined by 1.6% throughout the day.
Against this backdrop of volatility, liquidations across leveraged crypto derivative positions surged to over $350 million, marking the highest figure since May 1, according to data from CoinGlass.
Liquidations occur when an exchange closes a leveraged trading position due to the trader’s inability to meet margin requirements or sustain losses. The majority of the liquidated positions were long positions speculating on rising prices, totaling approximately $250 million, indicating that over-leveraged traders were caught off-guard by the sudden price drop. ETH traders bore the brunt of the liquidations, with $132 million in losses, followed by $70 million in BTC derivatives liquidations.
