Leverage stacking reaches its limit, ultimately leading to a significant market pullback.
Written by: 1912212.eth, Foresight News
In the early morning of June 13, Bitcoin dropped from $108,000 to $102,664, experiencing a rare seven consecutive four-hour declines. Ethereum fell from around $2,800 to $2,455, with an unusual nine consecutive four-hour declines. Most Altcoins were significantly impacted by the overall market.
According to Coinglass, the open interest contract data showed that within 24 hours, the network liquidated $1.12 billion, with long positions liquidating $1.04 billion. The largest single liquidation occurred on Binance's BTCUSDT, valued at $201 million.
On June 12, glassnode data showed that Ethereum's open interest contracts just reached a historical high, exceeding $20 billion. Despite ETH's slight pullback from the $2,800 level, market leverage continues to accumulate as traders increase leverage using stablecoins.
Additionally, after SharpLink Gaming, an "ETH micro-strategy" listed company, filed a document with the SEC regarding "PIPE investor stock sales", its stock price plummeted by about 70% after-hours, causing a significant negative impact on ETH.
The company submitted an S-3ASR registration statement allowing the resale of up to 58,699,760 shares for over 100 shareholders related to its PIPE financing. The market initially interpreted this as PIPE investors selling their shares. However, the company's board chairman Joseph Lubin clarified on X platform that the market "misread" the S-3 document, which is just a standard procedure for pre-registering shares for potential resale and does not represent actual selling.
The significant growth in futures open interest contracts indicates that the current price increase is primarily driven by leveraged futures traders rather than spot buyers. Compared to Bitcoin, which is still driven by spot demand, Ethereum's trend shows divergence. Recently, call option buying has surged, and with gamma hedging effects, ETH faces a clear gap risk. The market becomes increasingly fragile and sensitive to momentum changes.
As the market anticipated Ethereum's strong rebound leading Altcoins, it unexpectedly turned downward again. What exactly happened?
Israel and Iran Reignite Military Conflict
In the early morning of the 13th local time, the Israeli Defense Ministry stated that Israel launched a strike against Iran. Defense Minister Katz claimed Israel conducted an airstrike on Iran, anticipating missile and drone attacks in retaliation. According to Xinhua News Agency, Israeli Prime Minister Netanyahu stated that the military strike against Iran would "continue for days".
Currently, Israel is in a state of emergency. CNN cited Israeli sources reporting that Israel is preparing for a major Iranian retaliation, larger than previous attacks. Sources indicated Israel intends to continue attacking Iran until it believes the nuclear threat is eliminated, though internal security agencies have doubts about achieving this through unilateral action. Israel's primary targets include Iran's nuclear facilities, military assets, and key military personnel.
Iranian state television just reported unconfirmed reports that Revolutionary Guards Commander General Soleimani might have been killed in the Israeli attack. The station added that another senior guard officer and two nuclear scientists may have also died. The report provided no additional details.
International market Brent crude and WTI crude futures rose over 8%. NASDAQ futures briefly expanded losses to 2%, S&P 500 futures fell 1.8%, and Dow futures fell 1.6%. Spot gold briefly rose to $3,420 per ounce, up nearly 1% intraday.
