Bittime - The price of ETH (Ethereum) has experienced a significant decline in the last week. Data shows that this drop has led to massive liquidations on DeFi platforms, with the total value reaching more than $5.4 million in the last 24 hours.
Ethereum itself was the party most affected by this liquidation, with a total of $4.2 million from the total. According to data from Parsec, if the price of ETH continues to fall to $3,008, the potential for additional liquidations could reach $24 million.
The liquidations that occurred were centered on on-chain derivative exchanges such as GMX, Kwenta, and Polynomial. These three platforms have cumulatively triggered over $52 million worth of liquidations in just one day.
In the world of DeFi, liquidation occurs when assets pledged as security for a loan are sold by a platform or protocol. This liquidation is usually carried out as an effort to avoid the risk of default.
DeFi and Liquidations Impact ETH Price Volatility
In the DeFi field, loans usually use an over-collateralized system to anticipate frequent cryptocurrency price fluctuations. This means, the value of the assets pledged as collateral must be greater than the value of the loan taken.
However, when the price of the collateral asset, such as Ethereum (ETH) in this case, drops drastically, it can trigger a liquidation event. DeFi platforms will automatically sell collateral assets to ensure the loan is paid, and these sales often occur at lower market prices, leading to potential losses for borrowers.
Check Today's Crypto Market:
ETH Price Falls, Crypto Market Capitalization Also Under Pressure
Source: Bittime.com
On March 20, 2024, the price of ETH (Ethereum) was at $3,126 per coin, down 7.53% in the last 24 hours.
Also Read How to Buy Crypto:
Ethereum price is currently trading around $3,126, down 20% over the past week. This decline also impacted the overall market capitalization of cryptocurrencies which fell 3.5% today and faced considerable liquidation after a month-long rally.
The recent price drops and liquidations are an important reminder of the inherent volatility of cryptocurrencies. This event also puts the spotlight on DeFi mechanisms, especially regarding managing liquidation risk for borrowers.
Analysis and Outlook for ETH Price
It is not yet clear what was the main trigger for Ethereum's price drop and massive liquidations on DeFi platforms. Some analysts believe that this price correction is normal after the rally that occurred over the last month.
Meanwhile, other analysts speculate that the price decline could be caused by external factors such as monetary policy or global economic developments.
The future prospects for the price of Ethereum are still uncertain. Market players are closely watching how investors respond and whether the $3,000 support level can be maintained.
If the price continues to fall past this level, it is feared that there will be a greater potential for liquidation. On the other hand, if prices can rebound and rise again, then the risk of liquidation can be minimized.
Conclusion
The recent massive liquidation event provides an important lesson on the price of ETH for investors, especially those involved in DeFi activities. Good risk management is required, including selecting collateral assets that have low volatility and setting a conservative loan-to-value ratio.
In addition, it is important to always follow the latest developments related to the cryptocurrency asset market and the factors that can influence digital asset prices. With vigilance and good risk management, DeFi investors can reduce potential losses due to liquidation.
Check Crypto Prices Today:
How to Buy Ethereum (ETH) on Bittime
You can buy and sell Ethereum (ETH) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Ethereum (ETH) is available on Bittime with the market pair ETH/IDR . To be able to buy ETH/IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Ethereum (ETH) on Bittime.
Monitor price chart movements for Ethereum (ETH), Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
Buy BTC Now or Wait for a Correction? Dilemma Between Golden Opportunities and Floating Losses
Affordable ETH (Ethereum) Purchase Costs, Mass Adoption Gets Easier After Gas Fee Drop
Shiba Inu (SHIB) Barking Again: Rally Toward $0.00004?
DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
Comments
0 comments
Please sign in to leave a comment.