Ether (ETH) traded lower on Thursday after a fresh knee-jerk reaction to yesterday’s US interest rate decision and a higher inflation outlook.
Key takeaways:
ETH dropped 7% to $2,100 on Thursday, liquidating $144 million in longs.
A break below $2,000 could trigger over $2.5 billion in additional long liquidations across exchanges.
The 50-day moving average around $2,100 is a key level to watch.
Ether risks $2.5 billion long liquidations
Data from TradingView showed 7% daily ETH price losses, with ETH/USD dropping as low as $2,140 on Thursday.
ETH/USD 1-hour chart. Source: Cointelegraph/TradingView
Ether’s correction is accompanied by significant long liquidations across the crypto market totaling $492.8 million over the last 24 hours. More than $144 million in long ETH positions were liquidated with Ether’s move to $2,100.
Total crypto liquidations. Source: CoinGlass
The correction occurred despite another 60,999-ETH purchase by Tom Lee’s Bitmine Immersion Technologies, which now holds roughly 4.6 million ETH, or 3.81% of the total supply.
Related: Ether accumulation data points to a rally toward $2.8K, but there’s a catch
Ether’s decline came amid fresh selling in US-based spot ETH exchange-traded funds (ETFs), which recorded more than $55.5 million in net outflows on Wednesday, snapping a six-day inflow streak, according to data from Farside Investors.
Spot Ether ETF flows table. Source: Farside Investors
Ether’s downward momentum may increase if spot and institutional buyers don’t step back in soon.
Ether’s downside may hinge on the key $2,000 support, as a correction below would trigger over $2.5 billion worth of leveraged long liquidations across all exchanges, CoinGlass data shows.
ETH exchange liquidation map. Source: CoinGlass
This means a significant amount of bullish bets would get wiped out on a move lower, leaving ETH vulnerable to a sharper downside cascade if bearish momentum takes hold.
ETH price stays sensitive to FOMC risks
Ether’s bearishness today follows the decision by the US Federal Open Market Committee (FOMC) to leave interest rates unchanged after the March 18 meeting.
The chart…
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