- Ethereum (ETH) has plunged 18% from $2,150 to as low as $1,750.
- Large ETH holders face liquidation risks amid the downturn.
- Some whales have injected millions in collateral to avoid liquidation.
Ethereum’s recent market downturn has left major investors scrambling to protect their holdings as liquidation risks mount.
Over the past 24 hours, the cryptocurrency has fallen from a high of $2,150 to as low as $1,750. This sharp decline has put Ethereum whales, investors holding significant amounts of ETH, under pressure as they fight to maintain their DeFi loans and avoid forced liquidations.
On-chain data from Lookonchain reveals that some of the largest Ethereum holders have taken urgent steps to rebalance their positions. One whale, who had taken out a loan of over 73 million DAI with 67,000 ETH (nearly $122 million) as collateral on Maker, should have been liquidated when ETH dropped below $1,800.
However, due to oracle pricing inefficiencies that temporarily placed ETH’s price just under $1,900, the investor was able to repay 1.53 million DAI and sell nearly 3,000 ETH, adjusting their liquidation price to $1,781.
Another whale with nearly 61,000 ETH worth $109 million in collateral and a liquidation price of $1,798.64 also benefited from these oracle inefficiencies, allowing them to avoid forced liquidation without needing to add fresh collateral.
Ethereum whales take aggressive measures
A whale associated with the Ethereum Foundation took more aggressive measures by injecting an additional 30,000 ETH, worth over $56 million, into Maker. This increased their total collateral to more than 100,000 ETH, valued at $182 million, and significantly lowered their liquidation price to $1,127. While this move reduced the immediate risk of liquidation, it also increased the investor’s exposure to market volatility.
Venture capital firm Longling Capital, founded by Meitu’s CEO Cai Wensheng, is also facing liquidation risks. In the past 24 hours, the firm has offloaded 21,000 ETH, valued at nearly $39 million, on Binance. Additionally, it transferred 299 ETH to Aave, likely as part of a broader strategy to rebalance its DeFi loans. Longling Capital is no stranger to high-stakes liquidations, having lost 94,000 ETH worth $114 million in the 2022 bear market.
