Whales Holding the Bag: $238M of ETH Teetering on the Edge of MakerDAO Liquidation

The Ethereum (ETH) market is currently navigating a turbulent sea, with significant price fluctuations placing substantial holdings of whales on the decentralized lending platform MakerDAO in a precarious position.

The Ethereum (ETH) market is currently navigating turbulent seas, with substantial holdings of whales on the decentralized lending platform MakerDAO teetering on the edge of liquidation due to significant price fluctuations.

A combined 125,603 ETH, valued at approximately $238 million, is at risk as Ethereum’s price dips below critical thresholds.

This situation highlights the broader market pressures impacting Ethereum’s price, which has seen it slip below the key psychological level of $1,900.

According to data tracked by blockchain analytics platform Lookonchain, one whale, holding approximately 64,793 ETH at an average price of $1,716, is dangerously close to its liquidation price on MakerDAO at $1,787.

With ETH trading at $1,841 at press time, this whale is only $54 away from triggering an automatic liquidation.

This particular trader nearly experienced a liquidation event on March 11 but narrowly avoided disaster by partially repaying their debt following a sharp ETH price drop.

However, the current market downturn has once again placed their position in jeopardy, with the health factor now at 1.04. Any further price decreases could trigger the automated liquidation mechanism, resulting in the forced sale of their collateralized ETH.

Another whale, holding 60,810 ETH as collateral, faces a similar predicament. This trader borrowed 75.69 million DAI at an interest rate of 0.5% and has already repaid 23.48 million DAI.

Their liquidation threshold is set at $1,805, meaning that if ETH prices fall below this level, their position will also be liquidated.

Together, these at-risk holdings amount to 125,603 ETH, which is currently valued at about $238 million.

A large-scale liquidation event could trigger a cascade of selling pressure, further exacerbating Ethereum’s price decline and potentially impacting the broader cryptocurrency market.

Earlier this week, market-wide turbulence saw major cryptocurrencies experience triple-digit percentage losses in a single 24-hour period.

According to data from crypto derivatives exchange FTX, Bitcoin (BTC) futures saw a massive 100% drop, while Ethereum futures also plunged by 99%.

According to Benzinga, the staggering losses in cryptocurrency futures followed a broader market downturn.

The U.S. dollar index soared to a 15-month high on Tuesday, August 1, as traders braced for the release of crucial nonfarm payroll data.

The cryptocurrency market has been grappling with a downturn throughout the year, with Bitcoin and Ethereum prices down significantly from their all-time highs.

According to Kroll, hackers stole a whopping $7.8 billion in cryptocurrency during the first half of 2023.

According to a report by the cybersecurity firm, the stolen funds are now being gradually dumped, putting downward pressure on Ethereum’s price.

According to crypto analytics firm Glassnode, the seven-day average in outflows from cryptocurrency exchanges has risen to 18,660 BTC.

This level of outflows is often associated with a preference for holding coins over selling them, which could be a bullish signal for the market.

However, the report by Kroll suggests that a portion of the stolen funds are still being sold, which could continue to weigh on Ethereum’s price in the near term.

According to data from blockchain analytics firm CryptoQuant, the amount of ETH held by whales with balances greater than 1,000 ETH has reached a 10-month low.

This suggests that some large traders may be reducing their positions in Ethereum, which could also contribute to the cryptocurrency’s price decline.

Overall, Ethereum’s price decline is attributable to a confluence of factors, including broader market turbulence, disappointing ETF performance, and the dumping of stolen ETH by hackers.

These factors are likely to keep Ethereum’s price under pressure in the coming weeks. However, the potential enabling of staking for Ethereum ETFs and the ongoing development of the Ethereum ecosystem could help to stabilize the market and drive investor interest in the long term.

The post Ethereum Whales on MakerDAO at Risk of Liquidation as ETH Price Drops; 125,603 ETH at Stake appeared first on Benzinga.