Major centralized exchanges face the potential for nearly $1 billion in leveraged position liquidations if Ethereum’s price tests crucial support and resistance levels in volatile trading.
Analysis indicates an Ethereum price surge reaching the $4,000 threshold could trigger forced closures of approximately $979 million worth of short positions betting against the cryptocurrency.
Conversely, should Ethereum experience a downturn dipping below $3,800, leveraged long positions valued at roughly $917 million are at risk of liquidation.
The ‘liquidation intensity’ at these levels signifies a high potential for significant market impact, reflecting the concentration of leveraged trades susceptible to forced closure rather than the precise count of contracts.
Such large-scale liquidation events, whether liquidating longs or shorts en masse, have the potential to rapidly exacerbate price swings, feeding volatility and dramatically accelerating market moves in either direction as positions are forcibly covered.
Traders closely monitor these liquidation clusters as they act as critical indicators of potential flash points where price movements can sharply accelerate, highlighting the importance of understanding these levels for anticipating extreme volatility.