Ethereum News Today: Over $20 million ETH short liquidations in 1 hour as bullish momentum surges

Over the course of a single hour on August 2, more than $20 million in short positions were liquidated in the crypto derivatives market, primarily linked to a sharp rally in Ethereum (ETH) as it approached the $3,800 level [1]. This event marked a significant shift in market sentiment, with traders who had bet against ETH facing forced closures of their leveraged positions. In the preceding 12 hours, short liquidations exceeded $20 million, while total long liquidations reached over $93 million [1], highlighting a rapid realignment of expectations among market participants.

The broader 24-hour liquidation figures revealed intensified market activity. Over $93 million in long positions were liquidated as traders who had bet on further ETH gains found their leveraged positions unwound amid the sharp price move [1]. This shift from long to short dominance in a short time frame suggests a sudden recalibration of risk across the derivatives market, with bearish traders now facing mounting losses.

The pattern of liquidations also reflects broader market dynamics. Reports indicate that over $570 million in Bitcoin short positions and $206 million in ETH short positions were liquidated within a 24-hour period, while only $20 million in long positions were lost [2]. These figures underscore the erosion of bearish sentiment that had dominated much of the year. The $160 million in Bitcoin short liquidations further highlights the structural shift favoring long positions across major crypto assets [2].

From a strategic perspective, these liquidations signal a market in rapid recalibration. Traders who had positioned for a continuation of the bearish trend are now being forced to reassess their strategies. The drop in short liquidations and the corresponding rise in long liquidations indicate a potential turning point in market psychology, with buyers increasingly stepping in more aggressively than sellers [2]. This could suggest the formation of a market bottom, as short-sellers are increasingly forced out of positions and long-side participants capitalize on volatility.

The leverage-heavy nature of the crypto derivatives market is also evident in the speed and intensity of these liquidations. A $20 million liquidation of short positions in just one hour indicates a sharp and unexpected price movement, likely catching many traders unprepared for the scale of the ETH rally [1]. The high leverage used to amplify gains means that any sudden price shifts can quickly trigger margin calls and forced closures.

While the exact catalyst for the ETH surge remains unclear, the broader market activity supports a growing sense of confidence. A reported $79 million in ETH staking activity by a major exchange reflects increased institutional interest and optimism in the asset’s future performance [3]. These actions suggest that both retail and institutional traders are aligning with a bullish narrative, potentially setting the stage for a more sustained price increase.

The $20 million in ETH short liquidations over a single hour represents a pivotal moment in the ongoing market movement. It not only illustrates the immediate volatility of the crypto market but also signals a deeper shift in trader positioning and sentiment. As long-side exposure continues to grow and short-sellers struggle to hold their positions, the balance of power in the market appears to be tilting toward the bulls. Whether this signals a temporary correction or a more lasting trend remains to be seen, but the scale and speed of the liquidations suggest that traders are beginning to take the bullish case more seriously.

Source:

[1] Binance

[2] Instagram

[3] Blocmates