Cryptographic merchants must remain attentive to an ether (Eth) The price falls below $ 4,200, which could trigger millions of long liquidations and increase market volatility.
When writing, more than 56,638 ETH in long bullish positions, valued at $ 236 million, faced a risk of liquidation in the decentralized perpetual exchange hyperlichid in case of a price drop in ether at $ 4,170, according to HyperDash data.
The data also showed a risk of considerable settlements at $ 2,150- $ 2,160 and $ 3,940. At the time of publication, Ether changed from hands to $ 4,260, less than 5% in the day, according to Coindesk data.
Andrew Kang, founder of the capital of the Cryptographic Risk Capital firm, declared in X that large long liquidations could reduce ether prices to $ 3,600.
“[I] I would estimate that we are about to reach $ 5B in ETH liquidations in exchanges, which leads us to $ 3.2K – $ 3.6k, “Kang said.
The liquidations, or the forced closure of the leverage bets, occur when the position of a merchant does not reach the margin requirements established by the exchange.
Margin scarcity generally occurs when the market moves against the merchant’s position, which makes its account capital fall below the minimum maintenance margin. This requests the exchange that automatically closes the position to avoid further losses and ensure that the funds provided are recovered.
Large liquidations largely cause a sudden increase in sales pressure, which pushes even lower prices, creating a waterfall effect that can trigger additional liquidations. This negative feedback loop tends to amplify market volatility.
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