Ether Drops 16% Amid Trump Tariff Fallout, $100M Positions At Risk

On Monday, traders in Asia faced significant losses as the ripple effects of U.S. President Donald Trump's tariff policy were felt globally. The cryptocurrency market, particularly Ether (ETH), was not spared from the fallout. ETH experienced a nearly 16% drop, trading above $1,490, while the broader market, as indicated by the CoinDesk 20 index, declined by 13%. The market participants braced for further potential losses as the U.S. market opened.

According to on-chain data curated by DefiLlama, nearly $100 million in ETH positions are at risk if the price slides by an additional 15%, pushing it below $1,274. This scenario could trigger the liquidation of more than $100 million in leveraged positions. On-chain liquidations are particularly impactful because they involve spot assets being sold onto the market, which can flood the market with supply and create more sell pressure. For instance, in MakerDAO's case, a liquidated position is auctioned off at a cheaper rate to traders who can then sell at a relative premium, exacerbating the market sell-off.

One wallet, which would face liquidation at $1,418, had several close calls on Monday but managed to trim its ETH holdings and repay some of the DAI it owed. DefiLlama data also indicates that if the price of ETH drops by 20%, an additional $36 million in positions could be at risk. The largest single ETH position, with $147 million in collateral locked, has a strike price of $1,132, highlighting the significant exposure in the market.

Lending protocols were among the hardest-hit tokens during the Monday trading session, with the category down 17% on the day. Concerns about the health of leverage around some positions have grown, adding to the market's volatility. The tariff fallout has underscored the interconnectedness of global markets and the potential for external factors to impact cryptocurrency prices significantly.