Bitcoin (BTC) and ether (ETH) lost pivotal support levels in the past 24 hours amid weakening sentiment for the broader crypto market – a move that caused over $520 million in liquidations, data shows.
The losses on Ether-tracked Futures were nearly double the $125 million suffered by bitcoin futures. These losses are unusual for ether which typically sees lower liquidations than Bitcoin on average trading days.
Futures of Stepn’s GMT tokens racked up $23 million in losses amid headwinds from Chinese authorities, who banned gameplay of the popular ‘step-to-earn’ protocol in the country. Futures on Solana lost $11million, while metaverse-focused Sandbox suffered losses of $9 million.
Ether fell to $1,728 on Friday morning, losing 9% over the last 24 hours. A sudden dip to similar price levels on Thursday night was prompted brought up by traders, but this morning’s slide was gradual.
The price-charts indicate support at current levels, and resistance at $1900. This was pivotal support earlier in the month. Similar prices were observed in July 2021. Losing this level could result in a fall to the $1300-$1,500 area or lower.
A fundamental reason for the drop could be a lack of demand for Ethereum’s block space, as per data from analytics firm Glassnode. ‘Gas,’ or network fees, prices have been trending downward since December and recently reached multiyear lows, the firm said in a note earlier this week.
Block space refers to the total amount of transactional information that can be included in each block. Users pay “gas” fees to do this. A decrease in block demand usually means that there is less user activity on any given network.
Meanwhile, analytics firm Coinalyze said in a Twitter message that Thursday’s volatility in ether was succeeded by a sudden increase in open interest on ether futures. Open Interest is the amount in any market that remains unsettled. A rise in this number usually means that traders are opening long positions or short positions in anticipation for a move.
At the time of writing Ether and major cryptocurrencies appeared to be stable. Futures and options data for bitcoin suggests traders are positioning for a bearish period ahead, however.