As negotiations between Iran and the U.S. had reportedly made significant progress, Iran announced yesterday the reopening of the Strait of Hormuz to all commercial vessels.

The announcement had an immediate impact on financial markets, particularly on derivatives markets.

This renewed confidence led some investors to quickly and aggressively position long on Ethereum.

Taker Buy Volume, which tracks market buy orders on derivatives markets, surged sharply during the hour following the announcement.

Binance alone recorded more than $1.72B in Ethereum derivatives buy volume within a single hour, making the figure particularly notable.

The price rally that followed then triggered a significant short squeeze on Binance, further amplifying the upward move initially created by aggressive buying activity.

During that same hour, roughly $24M in short positions were liquidated almost instantly, highlighting how fast and powerful the move was.

It is also worth noting that funding rates were deeply negative at -0.004%, indicating that the majority of investors were positioned short on Ethereum at the time.

More broadly, this reflects how sensitive investors currently are to headlines and developments related to the conflict between Iran and the U.S.

That sensitivity tends to make markets increasingly unstable and erratic, making aggressive leverage particularly dangerous, as seen during this move.

Written by Darkfost