Grayscale: The recent large drop in ETH may be due to excessive long positions in perpetual futures, and leveraged traders in the Asian market domina

According to Grayscale's analysis, one of the reasons for the relatively large drop in Ethereum price seems to be the excessive long positions of perpetual futures. In May 2024, when the US Securities and Exchange Commission (SEC) approved the issuer's 19b-4 application for US spot Ethereum trading products (ETP), traders significantly increased their total positions in perpetual futures, perhaps expecting prices to further rise after obtaining comprehensive regulatory approval. This approval occurred in July 2024, shortly after which the US spot Ethereum ETP began trading. In the recent decline, some long positions were liquidated, accelerating the price drop. On August 4th, Ethereum's price fell by 7.6% in just three minutes, and the total liquidation amount of perpetual futures on that day alone reached 340 million US dollars. As the sell-off occurred during the US overnight trading period and there was a significant discount in the spot prices of Binance and Coinbase, the liquidation seemed to be mainly driven by leveraged traders in Asia.