Crypto Whale Deposits $3.52M to Prevent $340M ETH Liquidation

A crypto whale with a substantial position in Ethereum is taking urgent measures to prevent a liquidation as the value of ETH declines sharply. According to on-chain data tracker Lookonchain, a prominent whale holding a 220,000 ETH long position on the decentralized finance (DeFi) platform Maker (MKR) made an emergency deposit of over 3 million DAI to avert liquidation.

The whale's actions were prompted by the sudden drop in ETH's value, which threatened to trigger a liquidation of the 220,000 ETH position worth approximately $340 million. By repaying 3.52 million DAI and depositing an additional 10,000 ETH, the whale managed to lower the liquidation price to $1,119.30, providing a temporary buffer against further declines in ETH's value.

This situation highlights the vulnerability of large positions in volatile markets, where sudden price movements can lead to significant losses. The whale's proactive measures underscore the importance of risk management in the crypto market, where liquidations can occur rapidly if positions are not adequately collateralized or if debt is not repaid in a timely manner.

Other crypto whales are also facing similar risks. Lookonchain noted that another whale is at risk of a $77 million ETH liquidation as the top altcoin by market cap dipped below $1,500. This whale holds a position of 53,074 ETH, which could be liquidated if the value of ETH continues to fall and the whale does not take steps to increase collateral or repay debt.

As financial markets have been trending lower, the sell-off in ETH has been particularly pronounced. On Monday, ETH collapsed to a low of $1,431 before regaining some of its losses. At the time of writing, ETH is trading at $1,548, down 11.8% in the last 24 hours. This volatility underscores the challenges faced by crypto traders in managing their positions during periods of market turbulence.

The actions taken by the whale to prevent liquidation serve as a reminder of the importance of monitoring market conditions and taking proactive measures to manage risk. As the crypto market continues to evolve, traders and investors must remain vigilant and adapt their strategies to navigate the inherent volatility and uncertainty of the market.