Ethereum is going through a critical period, and a fall of 20 % could trigger $ 336 million in liquidations on the DEFI market. With key levels to monitor and increased volatility, investors must prepare. Risk analysis, adaptation strategies and solutions to protect your crypto portfolio in the face of this threat.
Ethereum can lose 20% of its value and cause a real tidal wave
Massive liquidations are often synonymous with high volatility and a snowball effect on the market. When the long -speaking long positions are liquidated, this accentuates selling pressure, which can still drop the price of Ethereum and cause new liquidations. This phenomenon, well known to traders, has already caused several brutal cras in the past, especially in 2021 and 2022.
According to Kevin Rusher, founder of the RAAC loan platform, a drop in Ethereum to $ 1,857 would trigger $ 136 million in liquidations, while a decline in $ 1,780 would cause an additional $ 117. The worst scenario? A fall of 20 % to $ 1,500, which can liquidate $ 336 million in DEFI loans. This crisis would notably be fed by a loan of $ 130 million backed by ETH on Sky (ex-Maker).
If eTh fall so low, what to do?
Can a question of the spirit of investors: can Ethereum really fall by 20 %? If we consider the recent evolution of the market, several factors could play against it. Macroeconomic uncertainty, the drop in liquidity in the crypto markets and the lack of enthusiasm of investors in the face of current regulations are all elements to monitor.
However, to alleviate this volatility of Ethereum, the integration of real assets such as real estate and gold in the DEFI could offer a more stable alternative to investors. These assets, less subject to extreme fluctuations, would make it possible to diversify the portfolios and limit the liquidations in cascade due to the excessive leverage.
Ethereum is therefore currently under surveillance. Will he resist pressure or dive towards new stockings? Crypto traders must then prepare for possible increased volatility and adjust their strategies to avoid being on the bad side of the market.
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