Ethereum Price Drop and Liquidation Rumors

Ethereum (ETH) has recently fallen over 8%, as social media rumors circulate about the Ethereum Foundation potentially liquidating its assets if prices drop to $1,100.

Market Speculation

Traders on the social platform X speculate that the Ethereum Foundation could face a liquidation of up to $100 million if the price of ETH declines further. One user remarked, “If the Ethereum Foundation gets liquidated at $1,100 to bottom us for the cycle surely that ends the simulation.” Another remarked, “The Ethereum Foundation getting liquidated at $1,100 will be this year’s FTX moment,” though others suggested that the foundation might just “add collateral” to avoid liquidation.

Currently, the Ethereum Foundation and its co-founders have not directly addressed the rumors concerning a $100 million liquidation. Nevertheless, ETH has been trending downward, with a nearly 10% drop over the past week and a total decline of 28% in the last month.

Recent Price Movements

According to crypto.news data, ETH has slipped below the $2,000 threshold, currently trading at $1,889. On March 10, the price dipped further to $1,791, marking the first time ETH has dropped below $2,000 since late 2023.

What Sparked the Liquidation Rumors?

The speculation surrounding the possible liquidation was fueled by a deposit of 30,098 ETH into a Maker vault, suspected to belong to the Ethereum Foundation. However, Ethereum developers have denied the wallet’s association with the foundation.

A Maker Vault is a smart contract within the MakerDAO ecosystem on Ethereum, allowing users to manage collateralized debt positions. The wallet currently holds over 100,000 ETH as collateral, with a significant debt position. Initial funding for this wallet was traced back to an early Ethereum investor rather than the Ethereum Foundation itself, although it previously received a notable transfer from the foundation in May 2022.

Conclusion

As ETH continues to hover around critical pricing thresholds, the crypto community remains on alert regarding potential liquidity issues and the impact of social media speculation on the market.