Several on-chain positions seem to be at risk of liquidation after leading altcoin Ethereum (ETH) slumped to a two-month low of $1,373. Here are the important data for popular altcoin projects…
Liquidations for Ethereum are in the air
According to DefiLlama data, a $9.2 million Ethereum position in MakerDAO will be liquidated at $1,367 per coin, while a $29.6 million position in decentralized finance (DeFi)-based lending platform Compound will be liquidated at $1,241 by the protocol’s smart contract. On-chain liquidations happen when the value of collateral added by a user borrowing an asset drops, and the user must add more margin to prevent collateral being liquidated. Conversely, if the value of the borrowed asset exceeds its borrowing capacity, the user will also take the risk of liquidation.
Data reported Thursday that $300 million of derivatives positions on centralized exchanges had been liquidated, and that number has now risen to $400 million, according to Coinglass. Meanwhile, decentralized exchanges and lending protocols risk a total liquidation of $119.3 million if the ETH price drops another 20 percent. Ether is trading 18 percent lower from its February 2023 high of $1,745 and 71 percent lower from its record high of $4,876 in November 2021. The drop in stocks, coupled with regulatory restrictions on crypto, has caused the price of crypto assets to skyrocket.
Voyager purges are also on the agenda
On the other hand, bankrupt crypto lender Voyager is creating additional selling pressure by draining its crypto holdings. A recent report from Arhkham Intel stated that the crypto platform has been on a selling spree for the past six weeks. Currently, there are $151 million worth of Ethereum (ETH) and $50 million worth of Shiba Inu Coin (SHIB) tokens in their wallets, both of which will be sold in the coming days given their six-week history.
According to the data, the company sold $100 million worth of ETH, $25 million worth of SHIB and $11 million worth of platform native token VGX in March. As of March 11, Voyager holds $750 million in assets in its vault, with Circle’s USDC stablecoin accounting for $488 million. Additionally, the lender holds $151.22 million in ETH, $49.53 million in VGX and $41.4 million in SHIB, all of which are at risk of being sold. Voyager appears to have started its selling activity long before US Bankruptcy Judge Michael Wiles approved Binance’s $1.3 billion bid to acquire Voyager.
Will altcoin price drop again?
Currently, Ethereum price has slipped below the 200-day Exponential Moving Average (EMA) and is hovering at $1,419, which is just above the 200-day Simple Moving Average (SMA) at $1,385, according to analyst Akash Girimath. Additionally, ETH fell to the weekly Fair Value Gap (FVG) from $1,501 to $1,296. According to the analyst, this came as a result of an imbalance of purchasing pressure that resulted in a 27 percent increase in less than a week in early January. Considering Voyager’s selling frenzy, Ethereum price is likely to tag the 200-day SMA at $1,385.
Ethereum price dropped 9 percent on March 9, and it can be speculated that Voyager’s $100 million selling spree may have been one of the reasons for this crash. A clear sign can be noted by looking at CryptoQuant’s Ethereum premium metric. This index is the percentage difference between the price of the ETH-USD pair on Coinbase Pro and the price of the Binance ETH-USDT pair. The low premium shows US investors selling through Coinbase.
On March 10, these ten chain metrics dropped to -0.282, indicating high selling pressure on Coinbase. On the other hand, as we reported as Kriptokoin.com, TRON’s founder Justin Sun moved $ 60 million worth of Ethereum-based stablecoins from his accounts on March 10 from the troubled Huobi exchange. Said funds moved to Aave, a DeFi platform around the same time, two exchanges under its control – Huobi and Poloniex, announced their plans to merge.
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