Crypto traders should be cautious for an ether (Eth) The value falls below $ 4,200, which can trigger millions in long liquidity and increase market volatility.
According to Hyperardash data, as a writing, more than 56,638 ETHs were given more than $ 236 million to long -lasting positions – a value of over -236 million – an ether value faced the liquidity risk on decentralized peritual exchanges hyperlicids.
Data also showed the risk of large size liquidity at $ 2,150- $ 2,160 and $ 3,940. According to the data of coindesk, at the press time, Ether changed his hand at $ 4,260, down about 5% a day.
Andrew Kang, the founder of Crypto Venture Capital firm Mechanism Capital, stated on X that large long liquidity could potentially lead the Ether prices below $ 3,600.
Kang said, “(i) estimates that we are about to hit $ 5B in ETH liquidation in exchanges, taking us up to $ 3.2K – $ 3.6K.”
The liquidation, or forced discontinuation of leveraged bets occurs when the position of a merchant is reduced by the margin requirements prescribed by exchange.
Margin deficiency usually occurs when the market moves against the trader’s position, causing their account equity to fall below the minimum maintenance margin. This motivates the exchange to automatically close the situation to prevent further damage and ensures that the borrowed amount is recovered.
To a large extent prolonged liquidation causes a sudden increase in selling pressure, which pushes prices even less, causing a cascading effect that can trigger additional liquidity. This negative response loop enhances market volatility.
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