More Selling Pressure On Ethereum As Large Defi Protocols May Sell $900 Million In ETH To Defend Their Positions

Ethereum In The $1,100-$1,200 Range With $900 Million In Liquidation Pressure From DeFi Protocols.

While the larger crypto market stays red, Ethereum seems to be faced with an even more pressing issue.

ETH has been on a free fall over the last week, and now things seem to be on the brink of getting worse if one particular point is to be reached.

Various crypto analysts have made attempts at predicting what might happen if the ETH price falls below the $1,200 mark.

$900 Million To Be Liquidated To Settle Debts

The fall of ETH price can be attributed to various factors, including the usual ripple effects in the entire market as well as the whale action in DeFi protocols.

Apparently, whales have been selling off. One instance was reported on Twitter by PeckShieldAlert, who pointed out that close to 28,000 ETH worth 37.4 million has been sold off by MarkerDAO to settle debts.

#PeckShieldAlert A @MakerDAO Vault sold ~28k $ETH (~$37.4m) to pay off debt, $ETH at $1,335 pic.twitter.com/McuYvvFjNJ

— PeckShieldAlert (@PeckShieldAlert) June 13, 2022

Another 65,000 was sold for the same reason after the wETH/USDC pair fell to $941.

#PeckShieldAlert At 11:56 am (UTC+8) $WETH/$USDC down to $941 may relate to a @MakerDAO Vault sold 65k $ETH to pay off debt. https://t.co/ukZLkQbcWW pic.twitter.com/IGdcgq09l5

— PeckShieldAlert (@PeckShieldAlert) June 13, 2022

Celsius has transferred about 104,000 ETH to FTX in the past three days, as Celsius Network, which created the CEL token, has stopped all transfers, withdrawals, and swaps on its network.

Parsec.finance, reports that around $900 million will be liquidated if the ETH price falls between $1100 and $1200. This is due to the pressure in the DeFi space, especially affecting MarkerDAO, AAVE, and Compound to maintain their stability.

Ajibola Lawal, Investment Lead at Kaicho Capital says, “As Ether currently trades $1,221, down over 16%, It’s fifty-fifty that this cascade comes through. Because in the same way that we can see their liquidations, the players at risk can attempt to defend their positions. The challenge that they face is if the prevailing selling pressure blitzes right through their attempts.”

As it is right now, ETH appears to be approaching this breaking point. The coin is currently trading at around $1,221, leaving just a little space to hit the liquidation point. Basically, liquidation occurs when an exchange decides to close a trader’s position due to a loss of the initial margin.

At this point, the trader’s account doesn’t have enough funds to maintain the open position.

Is It A Bear Market?

Bearish sentiments have been flying all over the crypto space since the beginning of the year. The crypto space has experienced a pullback for the last few months.

As a matter of fact, there have been predictions to this effect, some coming from popular crypto market players like Peter Brandt. Peter Schiff also predicted that ETH can fall below $1000.