Ethereum News Today: Ethereum surges 15% triggering $744M in crypto liquidations as Powell hints at rate cuts

Over the past 24 hours, the cryptocurrency market experienced a dramatic wave of liquidations totaling approximately $744 million, primarily driven by sharp price swings in Ethereum. The majority of these liquidations—amounting to over $340 million—were linked to ETH derivatives, with nearly $259 million in short positions wiped out as the asset surged toward its 2021 all-time high [1]. The event, which unfolded on major exchanges such as Bybit, Binance, and OKX, highlighted the growing risks associated with leveraged trading in an increasingly volatile market [1].

The sudden price movement was triggered by comments from Federal Reserve Chair Jerome Powell suggesting the possibility of interest rate cuts in the near term. This led to a rapid 15% increase in Ethereum’s price, pushing it to $4,842—just shy of its previous peak. However, the momentum failed to hold, and ETH receded slightly to around $4,773 at the time of reporting [1].

This liquidation event was not limited to Ethereum. Across the broader crypto derivatives market, over $668 million in contracts were liquidated, signaling systemic volatility across the asset class. Notably, Ethereum's independent price action—typically seen as following Bitcoin's lead—underscored its current momentum amid shifting macroeconomic expectations [1].

The rapid and substantial liquidations reflect the heightened sensitivity of crypto markets to central bank signals. Traders reacted almost immediately to Powell’s remarks, leading to a sharp repricing of positions and the rapid erosion of leveraged bets. Unlike traditional financial markets, the crypto space is characterized by high leverage and fast execution, factors that contribute to more frequent and severe liquidations during periods of uncertainty [1].

The incident also highlights the risks inherent in leveraged trading strategies. While such strategies can generate substantial returns during favorable conditions, they also expose traders to sudden and significant losses during sharp price corrections. This was clearly evident as traders who had positioned themselves against Ethereum’s upward trend saw their positions erased within a single day [1].

Looking ahead, Ethereum remains close to a key psychological level. A sustained break above its 2021 high could reinvigorate bullish sentiment and extend the current upward trend. Conversely, a failure to maintain this level may trigger another round of repositioning, potentially leading to increased volatility and further liquidation risks.

The broader implications of the event point to the growing importance of macroeconomic signals in shaping crypto market behavior. As institutional and retail traders alike continue to react to central bank policy shifts, the sector remains vulnerable to sudden price swings and associated leveraged losses. The episode serves as a stark reminder of the inherent risks of high leverage in a market where volatility is the norm rather than the exception [1].

Source: [1] Ethereum Shorts Crushed: $259M Lost as Price Nears ATH (https://99bitcoins.com/news/altcoins/ethereum-shorts-crushed-259m-lost-as-price-nears-ath/)