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$31 Million in Ethereum Liquidates in Past 12 Hours as ETH Collapses Below $3.8k


cryptoknowmics.com 21 December 2021 08:30, UTC
Reading time: ~2 m

Data demonstrates Ethereum liquidations surpassed $31 million in just 24 hours alone as soon as the ETH’s value falls below $3.8k. Liquidation information for ETH uncovers that there have been some substantial liquidations today as $15 million in futures has been sold as of now.

$31 Million in Ethereum Dissolves as Price Relinquishes to $3.7k

Liquidation data for ETH discloses, "Today we've witnessed some heavy liquidations; as $15 million in futures has been liquidated in just one day time." Before overviewing the data, it's good to perceive basic analysis on how the Ethereum futures market works, subject to anyone's awareness about the concept of derivatives trading. A future product entitles traders to bet on the price of a commodity; without the necessity to hold the asset.

This form of trading is adequately popular in the crypto world. The reason behind its popularity is the possibility of gains associated with the price's escalation as well as decline. For the participation, investors must exert some initial margin in crypto such as Ethereum, fiat, etc., which acts as collateral. Traders can even use the leverage that's eventually bigger than the margin; which avails traders to get higher gains.

Nonetheless, if the bet fails, it'll allow the price move in the opposite direction. And here the trader has to undergo significant losses just because of the nature of leverage trading. In case of total or partial loss of initial margin, depending on the exchange, the trading company dynamically closes the position. This situation is termed "liquidation."

Overview of the Liquidation Process

In just the last 4 hours, more than $15 million in ETH was liquidated, while double the same was liquidated in the last twelve hours. Altogether, more than $45 million positions in ETH got terminated in the past 24 hours. These liquidations that were merely a drop in the value of the coin have now taken it to a further drop up to the $3.8k price level.

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