Ethereum (CRYPTO: ETH) plummeted to $950 at one point Monday, driven by 65,000 ETH dumped on Uniswap (CRYPTO: UNI).
What Happened: On June 13, ETH fell below the spot price, relative to other exchanges, to $950 on Uniswap. Ethereum, across numerous multiple trading pairs, was unloaded for a plethora of stablecoins such as Dai (CRYPTO: DAI), Tether (CRYPTO: USDT), and USD Coin (CRYPTO: USDC), and was dumped to the amount of 65,000 ETH.
Thus, a major squeeze comprising $100 million of liquidity caused ETH’s spot price to plunge 20% below other platforms on Uniswap.
According to UToday, an Ethereum ICO participant supported lending of 560,000 ETH, with a remainder of 409,000 ETH in their wallet. From its origin in March 2021 to May 2022, financed with 130,000 ETH, a position was opened. The aforementioned participant used the ETH to borrow 80 million DAI and financed the lending with 96,700 ETH on Maker DAO (CRYPTO: MKR). After then over-leveraging their position, when ETH fell to $1,200 today, there stood a liquidation risk. Therefore, the participant reduced the size of the position by selling more than 65,000 ETH on Uniswap to reduce his liquidation price, thereby causing the price of ETH on the platform to fall to $950.
Why It's Important: In bearish market climates, especially during sharp downtrends, whale dumps can be detrimental to token prices. Therefore, major position holders must be cautious on exchanges and decentralized platforms when unloading their positions.
Deleveraging significant-sized positions at once on a single platform poses the risk of the exchange suffering by having the token trade at a price lower than its actual spot value. Thus, as the future for cryptocurrency prices remains uncertain, it is best for retail investors — and whales, especially ones that are heavily leveraged — to proceed with caution.
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