Massive Liquidation Risk On Ethereum, Whales Are Shaking

The price of Ethereum has fallen below $1,900, recording a 6% decline compared to last week. This drop endangers several important positions on MakerDAO with more than $238 million potentially at risk.

Ethereum whales on alert due to liquidation risk

The recent fluctuations in the price of Ethereum have placed several major investors in a particularly vulnerable situation. Two “whales” (a term for large holders of cryptocurrencies) operating on the MakerDAO protocol are currently at risk of forced liquidations.

According to the data collected by the blockchain analysis platform Lookonchain, a combined total of 125,603 ETH, representing approximately $238 million, could be liquidated if critical thresholds are breached.

The situation is particularly concerning for one of these large investors who controls approximately 64,793 ETH. His liquidation price is set at $1,787, while Ethereum is currently trading around $1,841. This margin of only $54 represents an imminent danger for this position.

This same trader had already narrowly avoided disaster on March 11th. Following a significant drop in price, he was forced to partially repay his debt to avoid liquidation.

Today, his health rate has dropped to 1.04, indicating that an additional drop in the price of ETH would automatically trigger the liquidation of his position.

An unfavorable market context for Ether

Ethereum is currently experiencing downward pressure fueled by several converging factors. The cryptocurrency has fallen below the symbolic $1,900 mark amidst widespread turmoil in the financial markets.

Persistent inflation fears and disappointing U.S. economic data have compelled many investors to reduce their exposure to assets considered risky.

The announcement by President Trump of the establishment of reciprocal tariffs, which will take effect on April 2, has also contributed to increased uncertainty in the markets.

This situation has led to a pullback in bitcoin, which briefly fell below $82,000 on Saturday before stabilizing around $82,400, down nearly 2% for the week. This retreat in bitcoin has naturally weighed on the entire crypto market, including Ethereum.

Multiple Threats and Risks of Cascade Liquidations

The recently launched spot Ethereum ETFs in the United States are also facing difficulties. Between March 5 and 27, investors withdrew more than $400 million from these funds, according to data from Farside Investors.

Although a slight trend reversal has been observed with capital inflows of about $5 million, adoption remains slow. The hope now lies in the potential activation of the staking feature, which could stimulate demand for these ETFs.

Another concerning element is the massive sale of Ethereum by a hacker. According to Lookonchain, hackers recently liquidated 14,064 ETH from THORChain and Chainflip, adding further pressure on the price.

The second whale in difficulty has deposited 60,810 ETH as collateral to borrow 75.69 million DAI (stablecoin), with a liquidation threshold set at $1,805. If the price of ETH drops below this level, this position would be automatically liquidated, potentially amplifying selling pressure in the market.

The coming days will be crucial for the Ethereum market. If the downward trend continues, forced liquidations of these important positions could trigger a domino effect and further accentuate the price drop.

Fenelon L.

Passionné par le Bitcoin, j’aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l’outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.