Ether’s rally propelled by short liquidations
By Daniela Ešnerová and Heleen Oude Nijhuis
13:38, 31 October 2022
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.
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.
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