Ether's (ETH) 11.5% slide over the past 24 hours has moved the second-largest cryptocurrency closer to a series of mammoth $340 million liquidations on collateralized debt platform MakerDAO.
A 11.5% slide in Ether (ETH) over the past 24 hours has brought the second-largest cryptocurrency closer to a series of mammoth $340 million liquidations on decentralized finance (DeFi) platform MakerDAO.
On-chain data shows three MakerDAO positions will be liquidated when the ETH price hits $1,926, $1,842 and $1,793. Each position is valued at between $109 million and $126 million.
Ether, the native token of the Ethereum blockchain, is currently trading at $2,390 following a market-wide sell-off sparked by waning sentiment and a drop in global equities.
Whether the plunge is the trigger for a bear market remains to be seen. In previous bull markets, assets have typically dropped by as much as 30% to shake out over-leverage before resuming their uptrend. ETH has fallen by 42% since Dec. 16.
In order to trigger the MakerDAO liquidations, ETH would need to fall by another 19%, at which point it could spark a liquidation cascade across DeFi protocols and exchanges.
Over the past 24 hours $296 million worth of ETH positions have already been liquidated on exchanges, according to CoinGlass.
It's important to note that deleveraging events spurred by sell-offs can present an opportunity for experienced traders to purchase undervalued assets, as the spot price is determined by a short-term lack of liquidity and not what might be considered the true value.
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