The Risky Move of an Ethereum Whale
An Ethereum whale recently deposited more than $40 million worth of ETH into a lending protocol and borrowed stablecoins, putting themselves at risk of liquidation during the recent cryptocurrency market decline.
The Whale’s Risky Strategy
- The whale deposited 12,734 ETH into the Compound lending protocol, borrowing $31.4 million worth of stablecoins.
- With a health rate of 1.06, the whale is close to being liquidated if the price of ETH falls to $2,984.
Ethereum’s Price Decline
Currently, Ethereum is trading around $3,125, experiencing a 4.8% drop in the last 24 hours and a 16.8% decrease in the past month amidst a broader crypto market downturn triggered by Bitcoin’s dip below $60,000.
The Dominance of Long-Term Ethereum Holders
- Long-term Ethereum investors now control approximately 78% of the circulating supply, reflecting the confidence of buyers who have held their funds for over a year.
- Recent data from IntoTheBlock suggests that long-term holders are accumulating more Ethereum as the price dips, indicating a bullish sentiment among investors.
Implications for the Ethereum Market
Long-term holders’ dominance in the market is seen as a positive signal for Ethereum, as their substantial holdings restrict the available supply and lessen downward price pressure on the cryptocurrency.
Outflows from Ethereum Investment Products
Despite the confidence of long-term holders, Ethereum-focused investment products faced significant outflows of over $60 million last week, marking the largest outflow in nearly two years.
Hot Take: A Balancing Act in the Ethereum Market
The current scenario in the Ethereum market highlights the delicate balance between short-term risks taken by whales and the steady accumulation of long-term holders, showcasing the evolving dynamics of investor behavior in the cryptocurrency space.
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