Ether Accounts for Almost Half of $520M Liquidations Amid Weak On-Chain Data

Bitcoin BTC$89,799.45 and ether ETH$3,056.13 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.

Ether-tracked futures lost upwards of $236 million, nearly double those of $125 million on bitcoin futures. The losses were unusual for ether, which mostly 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 SOL$133.34 lost $11 million, while metaverse-focused sandbox (SAND) saw $9 million in losses.

Ether dropped to as low as $1,728 in early Asian hours on Friday, losing some 9% of its value over the past 24 hours. A sudden dip to similar price levels on Thursday night was prompted by traders, but this morning’s slide was gradual.

Price charts suggest support at current levels and resistance at $1,900, which acted as pivotal support earlier this month. Similar prices were previously seen in July 2021, and losing the level could see ether drop to the $1,300-$1,500 range 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 is the amount of transactional data that can be included in each block, with users paying gas fees for doing so. Lower block demand generally means a fall in user activity on any particular 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 of unsettled futures in any market, and an increase in the figure usually implies traders are opening long, or short, positions in anticipation of a move.

Ether and other major cryptocurrencies seemed to stabilize at writing time. Futures and options data for bitcoin suggests traders are positioning for a bearish period ahead, however.