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Ether’s rally propelled by short liquidations

By Daniela Ešnerová and Heleen Oude Nijhuis

13:38, 31 October 2022

Ether (ETH) coin with market moves overlay
ETH/USD short trade liquidations saw a 261% jump day-on-day last Tuesday, Capital.com platform data show. -- Shutterstock

The ether-led cryptocurrency market rebound in the wake of the United Kingdom's vote to recognise cryptocurrencies as regulated financial instruments last week, prompted a jump in ETH/USD short liquidations which further propelled the rally, Capital.com data shows.

ETH/USD short trade liquidations saw a 261% jump day-on-day, the trading figures revealed.

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Ethereum (ETH) to US Dollar

Crypto market uptick

Last Monday, Rishi Sunak, who had previously shared a vision for the UK to become “a global cryptoasset technology hub”, officially became the British prime minister. The following day, the UK House of Commons voted to recognise cryptos as regulated financial instruments. 

The cryptocurrency market reacted positively to the sentiment, with ETH leading the rebound, adding some 17% between 25th and 26th October, and breaching $1,500 for the first time since The Merge.

The gains seemed to have surprised traders betting against the second-biggest cryptocurrency, as they rushed to close their positions. Capital.com's platform registered a 261% day-on-day increase in ETH/USD positions closed.

SOL/USD

172.98 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

XRP/USD

0.60 Price
-0.580% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.13 Price
-2.340% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,492.04 Price
-0.960% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

A high number of short bet liquidations can lead to further increases in the asset's price. 

Bitcoin, the crypto king, also followed a similar pattern, adding over 8% in value between 25th and 26th October. On 25 October, Capital.com's platform registered a 162% increase in BTC/USD short trade liquidations compared to a day prior. 

 The next day, 26th October, these increased levels were still visible.

Markets in this article

ETH/USD
Ethereum / USD
3492.04 USD
-33.98 -0.960%
BTC/USD
Bitcoin / USD
66815.00 USD
-618.2 -0.920%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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