Volatile Ether Market Threatens Long Positions; Consensys Challenges SEC Over ETH Regulation
Summary:
Ether (ETH) long positions valued at over half a billion dollars could face liquidation due to the cryptocurrency's price volatility. Fears are growing that Ether's spot ETF may not receive approval from the U.S. Securities and Exchange Commission (SEC) leading to considerable uncertainties and legal challenges for Ethereum. Recent price fluctuations have shown that even a minor 2.25% drop from its current value could lead to significant long liquidations. Further, software development company Consensys has filed a lawsuit against the SEC and its five commissioners claiming a premeditated attempt to regulate ETH as a security.
Ether (ETH) long positions valued at over half a billion dollars may be at risk of liquidation if the digital coin undergoes similar price volatility as witnessed last weekend. This precarious position arises from growing fears that Ether's spot ETF may get a thumbs down from U.S. Securities and Exchange Commission (SEC) next month. At the moment, Ether is exchanging hands at around $3,134, according to CoinMarketCap data. Over the past month, its price has danced between $2,915 and $3,705.
In recent weekends, Ether's price has displayed bouts of short-term volatility, after which it has swiftly stabilized at vital support marks. On April 20th, the price took a slight dive of 2.25%, hitting $3,036. A week earlier, it plunged by 9% touching $2,950 but then bounced back to $3,075.
If Ether's price follows the same volatile trajectory this weekend, a considerable volume of liquidations stand at risk. Even a minor 2.25% fall from the current price could trigger long liquidations amounting to $510 million, based on CoinGlass data. A more significant fall equivalent to the 9% drop observed the previous weekend could result in a colossal $853 million being wiped out in long liquidations.
Ether's price is walking a tightrope, as any drastic changes could catalyse a wave of substantial liquidations. These potential liquidations loom large as Ethereum grapples with other legal challenges and uncertainties around its spot ETF.
Cointelegraph, on April 24th, reported that U.S. issuers, as well as other companies, anticipate the SEC to disapprove spot Ether ETF applications come next month. This follows recent meetings with the regulator, as indicated by the quartet involved in the discussions. According to the four individuals, these discussions were unilateral, with the SEC personnel not touching on the specifics of the proposed products.
Conversely, it was disclosed last Thursday that Consensys, a software development company, has sued the SEC and its five commissioners on the grounds that they are premeditatedly attempting “to regulate ETH as a security.”
Please note, this article is void of investment advice or recommendations. Investment and trading engagements carry risk, and one should perform their due diligence before making any financial commitments.
Published At
4/26/2024 9:15:35 AM
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