Ethereum rallies to 20-month high as Bitcoin ETF approval spurs altcoin gains

Several large-cap cryptocurrencies, including Ethereum, Solana, Cardano, and others, rallied following the approval of a spot Bitcoin exchange-traded fund (ETF) in the U.S.

BTC’s price mostly traded flat following the news, posting a modest 1.35% gain to trade at $46,258 as of press time. This price performance is surprising considering the hype and enthusiasm the applications generated over the past several months.

Several analysts had predicted that the ETF approval could be a “sell-the-news” development. K33 research senior analyst Vetle Lunde claimed that BTC’s price performance following the SEC fake ETF approval rumors of Jan. 9 showed that the “ETF approval rehearsal favors a sell-the-news reaction.”

However, crypto analyst Michaël van de Poppe chimed that BTC’s price might improve “with the deal-flow on the ETF approval.” He added that this might be the cycle BTC’s price going above $300,000.

Meanwhile, data from CryptoSlate show that the other top 10 digital assets by market capitalization, barring stablecoins, recorded gains of more than 4% during the past day. Notably, ETH jumped 10% to more than $2600, its highest value since May 2022.

Similarly, the high-flying SOL token is up 4% to reclaim the $100 level, while ADA, BNB, Avalanche, XRP, and Dogecoin gained 14%, 5%, 13%, 6%, and 7%, respectively.

Additionally, the overall crypto market rose 4% to $1.77 trillion.

Over $270 million liquidation trails ETF approval

The price performance of these digital assets resulted in the liquidation of approximately $272 million from more than 85,000 traders.

Coinglass data shows that Bitcoin traders lost nearly $85 million during the reporting period, with most of the losses borne by traders betting on a bullish price movement for the top cryptocurrency.

Conversely, Ethereum’s price surge resulted in significant losses for short traders betting against an upward price movement. This cohort of traders lost $54 million, while long traders incurred approximately $30 million in losses.

Notably, the single most substantial liquidation was a $3.81 million short position against Ethereum on Binance.

Other prominent assets such as Solana, XRP, and BNB also saw liquidations amounting to $12.53 million, $3.81 million, and $793,000, respectively.

Meanwhile, traders on Binance and OKX accounted for more than $190 million of the total losses during the reporting period.