Ethereum Price Plunges 8% as Liquidations Reach Highs: What’s Next?

• Ethereum (ETH) price dropped 8% to a low of $1,976
• Bullish liquidations jumped to the highest point since March 9 and shorts liquidations were over $1.2 million
• Ethereum joined other cryptocurrencies in a major sell-off on Monday due to Gary Gensler’s questioning about Ethereum being a financial security

Ethereum Price Drops

Ethereum (ETH) price nosedived suddenly as more investors liquidated their positions. The coin pulled back to a low of $1,976, the lowest level since Monday this week. It has dropped by more than 8% from the highest point this week.

Liquidations Increase

CoinGlass reported that the amount of bullish liquidations jumped to over $41.1 million, while shorts liquidations were at over $1.2 million. These numbers were significantly higher than on Wednesday when bulls liquidations were just $9.6 million with shorts liquidations at $16 million. In most periods, cryptocurrencies jump when short-sellers start liquidating their coins and vice versa.

Ethereum Outflows

The decline also coincided with outflows from several centralized exchanges such as Binance which had an outflow of over $18 million in the past 24 hours and Bitfinex, Huobi and Bybit losing over $20 million each.

Gensler’s Testimony

Gary Gensler’s testimony on Tuesday caused further concern for investors as he repeatedly refused to answer questions regarding whether he believes that Ethereum is now a financial security or not. In previous interviews, Gensler said that he believes that Ethereum and other proof-of-stake coins are securities but his main concern is the opaqueness of staking which should be regulated to protect customers

SEC Identifies Coins

On Monday, the SEC identified five coins including Algorand that it believes are securities adding further pressure on ETH value as investors become increasingly wary of holding digital currencies..