The traders of Ethereum seem to have quite a few reasons for panicking after the 13% drop in the price of the coin to $4,100. The swift and imminent pullback appears to have gone through a 55-day ascending channel that had its sights set at a target of $5,500. Understandably, there are still quite a few that aren’t overly worried about the technical analysis behind it, as they would understand that the daily volatility of 3.4% for the cryptocurrency would definitely justify the price swing- currently at -10%.
Still, it would be foolish of one to disregard externalities such as the Infrastructure Bill passed by the federal government on Monday.
This legislation would directly affect Ethereum, as it requires every digital asset transaction at a price above $10,000 to be reported to the IRS. It would remain pretty unknown if it would then be applied to most businesses and individuals that have been developing wallets and blockchain technology.
Also, on the 12th of November, the SEC went on to officially deny the application request for the Bitcoin exchange-traded fund. The regulator cited that this fell under fraudulent and manipulative acts and practices- right beside the lack of transparency that was pretty visible on the USDT stablecoin.
Ethereum’s Liquidations Were Insignificant
The unexpected price denomination of Ethereum did go on to trigger a sum of $200 million worth of leveraged long futures contract liquidations, but it would still see major open interest on futures markets of the cryptocurrency as being healthy.
If one were to look at the data provided, one would be able to highlight how the current $11.9 billion was still in its place for quarterly and perpetual futures. Not only that, it was higher by 37% from what it was just a couple of months ago.
As of now, the preferred instruments for arbitrage desks and whales are the quarterly futures of Ethereum.