Ether’s (ETH) Recent Slide

Ether’s (ETH) 11.5% decline over the past 24 hours has pushed the second-largest cryptocurrency closer to $340 million liquidations on the collateralized debt platform MakerDAO.

On-chain data indicates that three MakerDAO positions are at risk of liquidation if the ETH price drops to $1,926, $1,842, and $1,793. Each of these positions is valued between $109 million and $126 million.

Currently, Ether, which is the token of the Ethereum blockchain, is trading around $2,390 following a market-wide sell-off triggered by declining sentiment and falling global equities.

Whether this price drop signals a bear market is uncertain. Historically, assets have experienced declines of up to 30% during previous bull markets to eliminate over-leverage before rebounding. Since December 16, ETH has fallen by 42%.

To initiate the MakerDAO liquidations, ETH must decrease by another 19%, which could result in a liquidation cascade across decentralized finance (DeFi) protocols and exchanges.

In the last 24 hours, $296 million worth of ETH positions have already been liquidated on exchanges, according to CoinGlass.

It’s important to recognize that deleveraging events caused by sell-offs can create opportunities for skilled traders to acquire undervalued assets, as the spot price is influenced by short-term liquidity issues rather than the asset’s intrinsic value.