TL;DR
- More than $510 million in long Ether positions could be at risk if last weekend’s volatility repeats itself.
- Uncertainty over the possible rejection of spot Ether ETF applications by the SEC in May is weighing on the market.
- The threat of mass liquidations adds to the legal and regulatory concerns surrounding Ethereum.
Amid growing concern over potential Ethereum price volatility, it is revealed that more than $510 million in long positions in this cryptocurrency could face liquidation if the volatility seen the previous weekend is repeated.
These sharp movements in the price of Ether have raised fears among investors, especially due to news related to Ether spot ETF filings with the United States Securities and Exchange Commission (SEC).
The expectation of a possible rejection of these applications in May has generated uncertainty in the market and contributed to caution among cryptocurrency investors.
The situation is especially delicate due to the little room for maneuver that Ether has in terms of price fluctuations without triggering significant liquidations.
For example, a small 2.25% decline in its current price would lead to liquidations of more than $510 million, according to data from CoinGlass.
This risk will be further intensified in the event of a steeper decline, such as that seen the previous weekend, which could result in liquidations of up to $853 million.
In addition to liquidation concerns, there are legal and regulatory uncertainties affecting Ethereum
Recent reports suggest that ETF issuers and other companies expect a rejection from the SEC in May, following meetings with the regulator in recent weeks.
According to participants in these meetings, discussions with the SEC have been one-sided and no substantial details about the proposed products have been addressed.
The picture is further complicated by the filing of a lawsuit by the software development company Consensys against the SEC and its five commissioners.
The lawsuit alleges plans to regulate Ether as a security, adding an additional layer of uncertainty and tension around the Ethereum ecosystem.
The combination of factors such as Ether price volatility, potential sell-offs, regulatory and legal concerns, as well as expectations surrounding SEC decisions, are creating a tense and unstable environment for cryptocurrency investors and investors. Ethereum market players.
