It was a volatile week for Ethereum. At the beginning of the Cryptocurrency to exert significant buying pressure that has made it possible for her to win against the Bitcoin back to the ground as they moved out into the 230-Dollar Region.
This momentum reached last night, a boiling point, as a buyer, ETH in a temporary recovery to highs of 255 $ shoots.
The market-wide slump this Morning, led the entire market in a crater, but ETH trade still well above the weekly lows.
The downward trend that threatens to ETH, possibly, could bring heavy losses, because a further decrease will lead to the massive amount of Long positions to a cascade of liquidations.
Ethereum looks next to the aggregated crypto-strong market volatility exposed
Ethereum recovered yesterday to all-time highs of over $250, before the crypto-currency was exposed to heavy selling pressure, you are here today to lows at $230 drop.
This decline was not limited to isolated on ETH and coincided with the crash of Bitcoin in the bottom of the 9,000-Dollar range.
Ethereum will likely maintain struggling, its upward momentum, as long as the entire market remains in a precarious position.
This volatility could increase due to the increased Trading volume of the ETH-option contracts yet.
The Open Interest for ETH-positions on BitMEX recorded as a result of this recent decline, a significant Drawdown of $ 25 million, but the OI in the Futures is still on-Month highs, as the chart below of Skew shows:
ETH risked a cascade of liquidations: the number of Long positions increases
A Trend that could affect the short-term Trend of Ethereum strong, is the fact that the number of notional long positions on Bitfinex recently, an all-time high.
Yesterday’s recovery to $ 250 left this number to climb even further, with the vast majority of these positions was resolved by today’s decline.
The popular pseudonymous crypto-Trader “Mayne” has shared a Chart from the massive growth of the Ethereum long positions in the course of the year 2020.
Image courtesy of Mayne
The current decline should highlight, ultimately, the beginning of a medium-term trend reversal, could Ethereums start losses in the coming days and weeks with the liquidation of some of these newly-opened Long positions.
This, in turn, could lead to a flood of liquidations, with similar effects on the ETH, as you saw Bitcoin in mid-March, as a cascade of a liquidation had the Asset on all-time lows at $3.800 crash.