Back

Ethereum Price Swings Could Trigger Over $2.5 Billion in Liquidations

Coinglass data shows that Ethereum exceeding $4,500 could lead to $879 million in short liquidations, while a drop below $4,300 may trigger $620 million in long liquidations across major CEXs.

ETH

Fact Check
Multiple sources confirm that Ethereum price swings can trigger large-scale, cascading liquidations. One piece of evidence specifically mentions a potential $1.952 billion liquidation event for Ethereum alone, which strongly supports the plausibility of the '$2.5 billion' figure. While another source mentioning '$2.5 billion' refers to expiring Bitcoin and Ethereum options, not direct liquidations, the combined evidence demonstrates that a liquidation event of this magnitude, triggered by Ethereum's volatility, is a realistic possibility.
    Reference: 1
Summary

Coinglass data indicates that if Ethereum’s price exceeds $4,500, short liquidations across major centralized exchanges could reach $879 million. Conversely, if Ethereum drops below $4,300, long liquidations could total $620 million, highlighting the volatility around these key price points.

Terms & Concepts
  • Liquidation: The forced closing of a leveraged position when losses breach maintenance margins, commonly used to manage risk on crypto exchanges.
  • CEX (Centralized Exchange): A cryptocurrency trading platform operated by a centralized entity that manages order books, custody, and user accounts.
  • Short liquidations: Forced closures of short positions that occur when prices rise and margin requirements are no longer met.