The decentralized finance (DeFi) ecosystem found itself on shaky ground as liquidations soared. In the last 24 hours, the DeFi ecosystem witnessed more than $5.4 million in collateral liquidations of which Ethereum (ETH) held a massive share. This comes amid the Ethereum price drop to $3,200 after it neared rhe $4,100 mark earlier this month.

Ethereum Price Drop Risks Massive Collateral Liquidation

The DeFi sector witnessed $4.27 million collateral liquidations tied to Ethereum alone, according to Parsec data. Moreover, amid the Ethereum price volatility, the data suggest massive collateral liquidations if ETH nosedived to $3,008. At this level, an enormous $24 million worth of ETH in collateral would be liquidated.

Adding fuel to the fire, on-chain derivatives exchanges, including GMX, Kwenta, and Polynomial, have collectively triggered liquidations surpassing a staggering $52 million in the same period. As Ethereum’s price dipped to $3,200 from its recent $4,100 peak, short traders realized their profits by buying back their positions.

However, long position holders indulged into panic selling to minimize their losses from the recent ETH price crash. According to Coinglass, Ethereum registered $120.27 million liquidations in the last 24 hours of which a staggering $103.54 million was liquidated by long players.

Whilst, short traders accounted for $16.73 million liquidations. The significant long liquidations could lead to a further ETH price slump. In addition, the heightened Ethereum collateral liquidations could add to the bearish turn. Furthermore, Ethereum open interest fell 3.49% to $12.52 billion as derivatives traders pulled their money out.

Also Read: Ethereum (ETH) Price Reversal Unlikely Soon As Majority Holders Still In Profit

ETH Price Plunges 9%

The Ethereum price crash over 9% today amid increased sell pressure. At press time, the ETH price plummeted 9.53% to $3,230.82 on Tuesday, March 19. Whilst, the crypto boasted a market cap of $387.84 billion.

On the contrary, the ETH 24-hour trade volume spiked 64.25% to $28.97 billion owing to the recent liquidations and whale selloffs. Earlier this month, the Ethereum price peaked at $4,092.28 but couldn’t surpass $4,100 owing to the recent bearish turn.

Moreover, the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday, March 20, has spurred volatility in the crypto market. Moreover, weak inflows into Spot Bitcoin ETFs fuelled the bearish sentiment, which also affected the entire market, including Ethereum.

Also Read: Ethereum (ETH) Price Reversal Unlikely Soon As Majority Holders Still In Profit

The post Ethereum Price Risks $24M Collateral Liquidation If ETH Falls To This Level appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am