A trader’s substantial gamble against Ethereum has resulted in a significant loss of a large portion of his $2 million margin. This development is particularly concerning considering the steady and consistent increase in ETH prices observed in recent weeks.
Screenshots shared on Reddit on July 3 shed light on a trader’s aggressive “shorting” of Ethereum using high leverage on the GMX platform.
GMX is a popular decentralized finance (DeFi) protocol that enables users to trade perpetual futures contracts, including those tied to ETH, with leverage of up to 50x.
Despite enduring substantial losses due to forced liquidation of their short positions, the trader remains undeterred and continues to persistently engage in high-leverage shorting without apparent concern.
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Since mid-June 2023, Ethereum prices have experienced a notable rise, surging by 20% based on current rates. The coin is presently trading at around $1,945, floating above previous liquidation thresholds that were approximately $1,900.
While spot rates have not witnessed further upward momentum from buyers, the bulls still maintain control.
The immediate resistance level remains at the psychological price point of $2,000, in addition to the April 2023 highs at $2,100.
Ethereum’s upward trajectory has been fueled by fundamental activities and growing confidence within the broader cryptocurrency community.
The price correlation between Bitcoin and Ethereum, both denominated in USD, has likely benefited Ethereum bulls during this rally.
The United States Securities and Exchange Commission (SEC) recently made statements alleging that certain native currencies associated with Ethereum’s competitors, including Algorand, Cardano, and Solana, may be unregistered securities.
This development has potentially acted as a tailwind for Ethereum, solidifying its position as a leading smart contracts platform.
The SEC, led by Chair Gary Gensler, has refrained from definitively classifying the status of ETH.
Depending on the agency’s eventual classification, any clarification could either bolster prices or trigger a sell-off.
Despite Ethereum’s consistent rise over the past two weeks, records indicate that the trader began shorting ETH when it was priced around $1,700, persisting until current spot rates.
Notably, the trader intensified their aggressive short positions starting from June 26.
The trader opened two positions in total: one with a leverage of 19x for $12 million and another with a leverage of 7x for $1 million.
As prices continued to climb, the $12 million collateral for the 19x leverage position was closed. However, this did not deter the trader from opening yet another short position, this time with a stop set at $1,999 and leverage of 30x.
The future trajectory of ETH prices remains uncertain. However, it is evident that the coin’s price has remained firm, defying the sellers who were active from mid-April to the first half of June.
Moving forward, the critical price points of $2,000 and $2,100 will likely play a significant role in shaping ETH’s trajectory in the latter half of 2023.
