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Single Trader Lost $55M on Ether Long Yesterday

Aug 18, 2023 at 10:57 am

In a sudden downturn of the cryptocurrency markets on Thursday, a mysterious individual trader or trading entity incurred a staggering loss of $55 million in an Ethereum (ETH) trade paired with Binance USD (BUSD) on the Binance crypto exchange. The data reveals that this position comprised 38,986.528 ETH and was liquidated at a price point of $1,434. Remarkably, this single trade accounted for nearly 30% of all liquidated futures on the Binance platform.

The sheer magnitude of this loss implies that a substantial entity, possibly a major firm or a significant Ethereum holder, bore the brunt of the swift market decline witnessed yesterday.

Significant liquidations in Ethereum transactions on the Binance platform. (Coinglass)Significant liquidations in Ethereum transactions on the Binance platform. (Coinglass)
Ethereum's value plummeted from $1,780 to a low of $1,560 within a matter of minutes, coinciding with a surge in trading volume from $6 billion to over $20 billion across various exchanges.

Following the sharp decline, Ethereum managed to partially recover its losses as reports emerged late in the day indicating that U.S. securities regulators were contemplating the approval of Ethereum (ETH) futures exchange-traded funds (ETFs) for trading within the country. As the Asian evening hours approached on Friday, ETH was trading slightly above $1,690, reflecting a 6% decline over the past 24 hours.

This dramatic dip in Ethereum's value occurred in the backdrop of one of the most extensive futures liquidations seen in over a year, surpassing even the market impact of the collapse of the crypto exchange FTX. Data indicates that highly leveraged long positions, indicating bets on rising prices, were unwound in what seems to be a classic instance of a long squeeze event. This transpired amidst unverified rumors of SpaceX divesting its bitcoin holdings. In reality, SpaceX merely adjusted the book value of its holdings, but the market misconstrued this as a signal to sell, resulting in increased selling pressure.

Bitcoin also experienced a significant decline of 7% within the past 24 hours, marking one of its most substantial drops in recent months during a period of otherwise low volatility. Concurrently, other major cryptocurrencies such as XRP, Dogecoin (DOGE), and Bitcoin Cash (BCH) led the downward trajectory, plunging by as much as 15%.

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