Over $280 million in short liquidations as ether rallies on renewed ETF optimism

Volatility over the past 24 hours has caused a spike in liquidations on centralized exchanges as ether rallied over 22%. 

The rally comes amid renewed optimism that the U.S. Securities and Exchange Commission might greenlight spot ether ETFs later this week. The first round of spot ether ETF deadlines is fast approaching, with VanEck's on May 23 and Ark Invest/21Shares' on May 24.

Surge in short liquidations

There have been over $350 million in liquidations over the past 24 hours across various centralized cryptocurrency exchanges, according to CoinGlass data . Of these liquidations, the vast majority, around $282 million, were short positions.

Ether positions took the brunt of the damage, with over $121 million in liquidations during the past 24 hours, almost $98 million of which were short positions.

Liquidations occur when a trader’s position is forcibly closed due to a lack of funds to cover losses. This happens when market movements are unfavorable to the trader’s position, leading to the depletion of their initial margin or collateral.

Ether rallies ahead of spot ETF decision deadlines

The wipeout of short positions came as ether rallied to a multi-month high of over $3,700, a price not seen since the middle of March.

According to Tuesday's QCP Capital report, if the SEC approves the two spot ether ETF filings this week, the digital asset's upward move is "far from over."

"With ether at $4,000 as a natural short-term target and at $5,000 for later-in-year target," the analysts added. However, the QCP Capital report said if there is no approval this week, "we could expect an ugly move back to $3,000."

Ether's price increased by over 22% in the past 24 hours and was changing hands for $3,785 at 9:49 a.m. ET, according to The Block’s Price Page .

The GM 30 Index , representing a selection of the top 30 cryptocurrencies, increased by 10% to 148.95 in the same period.