Traders racked up $182 million in losses on ether-tracked futures products in the past 24 hours, according to data from analytics tools Coinglass. That is $14 million higher than bitcoin-tracked futures, which usually see the largest liquidations in the crypto market, during a comparable period.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of initial margin. This happens primarily in futures trading, which only tracks asset prices, as opposed to spot trading, where traders own the actual assets.
More than 87% of the total $182 million in losses came from long positions, while only $22 million worth of short positions were liquidated. Majority of the liquidations occurred on crypto exchange OKEx, which saw just under $79 million in losses, followed by FTX at $27.55 million.
Longs are futures positions that bet on rising prices of their underlying assets. Shorts, on the other hand, are futures trades that bet on declining prices.
Ether lost the $3,300 support level in early Asian hours on Friday, plunging to as low as $3,113 before briefly gaining over $90 at the time of writing. Friday’s drop was a continuation of a market-wide decline that started on Wednesday. The U.S. Federal Reserve released the minutes of its December meeting that signaled tightening of financial policies and caused a sell-off in risky assets.
The Relative Strength Index (RSI) reached oversold levels again on Friday after briefly venturing out of that zone on Thursday night. RSI is a technical tool used to measure the magnitude of price movements, and oversold levels imply assets might be undervalued after a price correction.
Ether failed to break over and hold above the $4,000 price level in December 2021, implying a weakening market at the time.
Among the major sellers in the past two months was the Ethereum Foundation, a non-profit that oversees development on the Ethereum network. The foundation moved 20,000 ether, worth over $9.5 billion at the time, from its cold wallet to crypto exchange Kraken in November 2021, which may have contributed to some of the selling pressure in the past two months.