Flash Crash, Ethereum Tests Support With 17% Drop And Risks Further Losses

After leading the crypto market rally for several weeks, Ethereum faces the return of the bears. The second cryptocurrency by market cap was pushing into the $4,000 resistance before a selloff sent it back to critical support. At the time of writing, ETH trades at $3,466 with an 11.6% loss in the daily chart. Ethereum bounces back from the low of its current levels. Some exchange platforms briefly recorded $3,100 for the cryptocurrency, but the recovery could face hurdles. As the market crashed, there were over $2,3 billion in liquidations recorded across exchange platforms. Bitcoin and Ethereum were performing well during the past weeks, as NewBTC informed. This attracted short-term sellers that mostly use perpetual future contracts to speculate on the market. Thus, leading to an increase in Open Interest and over-leverage positions. The funding rates for this sector flipped positive in the past weeks, leaving the market open for another capitulation event, similar to May, and June. El Salvador implementing its Bitcoin Law could have been the trigger. When crypto exchange Coinbase debuted in the stock market, Ethereum and other cryptocurrencies saw a decline caused by an over-leverage market. However, invest Daniel Cheung believes this could be healthy for the market in the long run. Via his Twitter account, Cheung reported the event as just another day in crypto: $2.3bn in liquidations was healthy today nothing to be concern...