The recent Ethereum price crash has put up to $2 billion in long positions at risk of liquidation if ETH drops to $4,200. According to Coinglass data, there is a massive cluster of long positions waiting to be triggered, which could lead to a wave of forced selling as traders rush to close their positions.
On the bright side, more traders are currently short than long on Ethereum, which means market makers could look for liquidity at higher levels up to $4,500. If ETH reaches this level, $2.8 billion in short positions could be wiped out, providing some support for the price.
Market commentator Zerohedge pointed out that net ETH shorts are at new highs on the CME, indicating that short traders are providing liquidity into new all-time highs. This trend was observed when ETH broke above $4,000 earlier this month.
Meanwhile, Ethereum continues to see significant demand from Ethereum treasury companies. BitMine, the largest ETH treasury company, recently announced an increase in its ETH holdings by $1.7 billion to $6.6 billion. Such purchases add buying pressure on ETH, which is positive for the Ethereum price.
Sell pressure from ETH ETFs and whales is currently weighing on the Ethereum price. SoSo Value data shows that these funds recorded a net outflow of $196.62 million on August 18, with BlackRock’s ETHA seeing a net outflow of $87.16 million. Additionally, whales like Longling Capital have been offloading ETH, locking in profits.
At the time of writing, the Ethereum price is trading around $4,230, down in the last 24 hours. Despite the current challenges facing the cryptocurrency, the market remains dynamic and traders are closely monitoring price movements for potential trading opportunities.