Ethereum Price Dropped 25% Then Surged 27% In Just 15 …

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Ethereums rally peaked at $418 on Aug. 2 only to crash to $302 within 10 minutes on Binance Futures, a 25%drop in one day. It rebounded to $385, a 27%upsurge in five minutes. Ethereums volatility coincided with Bitcoins, which dropped from $12,000 to $10,600 within 15 minutes.

Analysts are pointing to Ethereums historical charts and numerous liquidations happening at the same time that lead to the sudden drop in price for the worlds second largest cryptocurrency.

Upon reaching $418, ETH was at a level it has not reached since August 2018. It also acted as a support level when it was first broken in November 2017, one month before Bitcoins all-time highand two months before ETHs own price ceiling. There is historical pressure at $418 that analysts think breaching it would lead to a fresh round of upsurge for the cryptocurrency.

At the $420 resistance, numerous sell orders were triggered, which led to a price drop that exacerbated a cascade of futures liquidations, Forbesreported. Analyst Joseph Young said that as soon as long contracts get liquidated, the holder would be forced to sell the contract, which heightened the selling pressure.

Across futures markets on all assets, $1.1 billion worth of positions were liquidated from $70,000 traders, said Larry Cermak, director of research at The Block. $400 million was liquidated on each OKEx and Huobi; followed by BitMEX ($164M) and Binance ($86), he added.

Cermak also said that on BitMEX, $647 million came from Bitcoin futures and while Ethereum futures accounted for $165 million of liquidations.

Analysts do not see the $420 rejection as a sign that the surge has ended. The basis for the rally is the upcoming Ethereum 2.0, said Kelvin Koh, co-founder of crypto firm Spartan Black. Depending on how hard ETH runs, the successful launch of phase 0 may culminate in a near term peak for ETH and other large caps, he told Forbes.

Su Zhu, CEO of Three Arrows Capital, arguesthat people who are bullish on Bitcoin and stablecoins but not Ethereum is also one reason why it is outperforming the benchmark cryptocurrency. The best alpha opportunities are when you can recognize the collective blind spot of the market, he posted on Twitter.

With the meteoric rise of cryptocurrency in the last two years, new investors are looking to see massive returns. Photo: Pixabay

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Ethereum Price Dropped 25% Then Surged 27% In Just 15 ...

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