Technical analysis is crucial for navigating current market uncertainties.
Market data indicates a significant 22% drop in Ethereum $2,169’s (ETH) value over the past two days. Approximately $126 million of a position was a mere 4% away from liquidation during this downturn. This situation is notable as ETH trades around the $2,080 mark.
ContentsFluctuations in Ethereum PricesAdditional Impacts in the DeFi Market Fluctuations in Ethereum Prices
Due to the impact of Trump’s tariffs, ETH erased its previous gains, leading to a substantial depreciation. Particularly in DeFi transactions, a recovery around the $2,000 level has helped avert potential liquidations on the MakerDAO platform.
On the MakerDAO platform, the price levels set for collateralized transactions play a crucial role. The initial liquidation threshold is determined at $1,929. Additionally, two positions at $1,844 and $1,796 collectively amount to $349 million. Market participants are focusing on these levels to capitalize on short-term volatility. Typically, these liquidity zones are targeted during severe declines.
Additional Impacts in the DeFi Market
Liquidations can exert a more significant impact compared to derivative transactions due to the activation of spot assets. Trading firms plan to take advantage of sudden price movements at these levels. When a liquidation occurs, the ETH used as collateral may be sold or auctioned, potentially adding further pressure on overall market price levels.
According to market data, a total of $1.3 billion in ETH is susceptible to liquidation, with $427 million within 20% of the current price. Another critical aspect to consider is ETH’s recent underperformance compared to Bitcoin (BTC) $87,444, which can be attributed to certain institutional investments and competition among various blockchains.
Market participants are assessing potential price declines at liquidation levels and the subsequent recovery. These developments introduce both risks and opportunities for investors, while also creating uncertainty in market dynamics. Technical analysis and risk management are emerging as prominent topics during this period.
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