Crypto Whale Injects $14.5M to Avoid $340M Liquidation Amid Market Slump

An unidentified cryptocurrency whale injected millions of dollars in emergency capital to avoid a potential liquidation of more than $340 million in Ether as markets slumped amid renewed macroeconomic pressure. The whale, holding a short position of 220,000 Ether (ETH) on the decentralized finance (DeFi) lending platform MakerDAO, faced the risk of liquidation if the price of Ether fell below $1,119.3. To prevent this, the investor deposited 10,000 ETH, worth more than $14.5 million, and 3.54 million Dai (DAI) to raise the position’s liquidation price. This strategic move was aimed at raising the liquidation price of the position, as reported by blockchain analytics firm Lookonchain on April 7.

The urgency of the situation was underscored by the fact that the whale's position was on the brink of liquidation. If the price of Ether had dropped to $1,119.3, the entire 220,000 ETH position, worth approximately $340 million, would have been liquidated. This event highlights the volatility and risks associated with large positions in the cryptocurrency market, especially during periods of macroeconomic pressure.

The incident occurred amidst a broader market slump, where another Ether investor was liquidated for over $106 million on the DeFi lending platform Sky. This investor lost more than 67,000 ETH when the asset's value crashed by around 14% on April 6. Sky's system requires users to maintain an overcollateralization ratio, typically 150% or higher, meaning that for every $100 worth of DAI borrowed, users must deposit at least $150 worth of ETH.

The recent market turmoil has led to significant liquidations across various platforms. In the past 24 hours alone, more than 446,000 positions were liquidated, resulting in total losses exceeding $1.36 billion. This includes $1.21 billion in long positions and $152 million in shorts. The largest single liquidation during this period was a $7 million Bitcoin (BTC) position on a crypto exchange.

The market volatility can be attributed to renewed macroeconomic pressures, including the announcement of reciprocal import tariffs by the U.S. President. This announcement sent shockwaves through global markets, leading to a $5 trillion loss by the S&P 500, its largest two-day drop on record. However, some analysts believe that the tariff announcement may finally bring an end to the global uncertainty that has plagued traditional and digital markets for the past two months. This could potentially lead to a "rotation toward the crypto markets" as investors start buying the dip, viewing digital assets as undervalued.