Ethereum (ETH) crashed on selling and liquidation pressure, but whales are still buying the dip

Ethereum (ETH) is becoming challenging even for whale traders. The token crashed into the $1,500 range, causing a series of panic sells and liquidations. At the same time, more confident whales returned to buy the dip. 

Ethereum (ETH) faced a mix of selling and buying pressure from whales. As ETH sank to the $1,500 range, some whales decided to panic-sell, while others got liquidated through decentralized protocols. 

ETH crashed to a daily low of $1,542.17 following the opening crash on the Asian markets. Later, the losses continued, as ETH slipped to $1,448.46, triggering more centralized and decentralized liquidation levels. 

Whale selling preceded the recent market crash

The market crash was preceded by at least two significant whales selling coins on centralized exchanges, and one high-profile liquidation on Maker. 

The selling started late on Sunday, when Symbolic Capital Markets added 38,132 ETH to centralized markets. Another unknown whale panic-sold 14,014 ETH in the past few hours, speeding up the recent price decline. 

More pressure came from decentralized liquidations. A whale on Maker was liquidated for a total of 65,570 ETH early on April 7. The whale has been increasing the ETH collateral in the past four days, reaching a ratio of 143% for borrowing DAI. However, this did not prevent the whale from being liquidated. 

In the past day, another whale with 56,995 WETH held in a Maker vault was also liquidated.  Another whale faces liquidation for 53,074 ETH at $1,495 per ETH. The liquidations may not be accounted immediately due to disparate oracle prices used for Maker’s vaults. Another whale repaid a part of the DAI loan, then deposited more ETH to lower the liquidation price to $912.02. 

Decentralized liquidations may accelerate as ETH sank to another threshold price at around $1,491, with an additional 57K ETH threatened on Maker. Not all vault liquidations are immediately accounted, as some whales may post collaterals to hold their position longer.

Decentralized protocols carry up to $1.1B in ETH threatened by liquidations at various price levels. After liquidations, the whales are left with DAI or other stablecoins to re-deploy, and some may return to buying ETH at a lower price. 

Additionally, around 22K of various forms of wrapped ETH have been liquidated in smaller decentralized vaults, based on PeckShield data . Currently, ETH sellers store their value in DAI, USDT, or USDC, awaiting better buying conditions. 

Whales already deploying stablecoins during the price slide

Whales returned to buying ETH as a way to deploy their stablecoins. Even at the $1,700 range, several traders bought back into the market. 

Most notably, the Seven Siblings whale deployed $42.2M to acquire 24,817 ETH. The Seven Siblings were not enough to stave off the selling and liquidations. However, this specific whale has appeared during multiple dips in January and February to acquire more ETH. 

The wallet now holds over $603M in ETH, which makes up 98% of the whale’s portfolio.  The Seven Siblings wallet stated buying when ETH was still in the $1,700 range. 

Another whale used Spark Protocol to borrow more DAI and buy the dip on Ethereum. The whale acquired an additional 5,227 ETH. Currently, some whales may be using DeFi to improve their average price for ETH. 

The token is still useful for its DeFi sector impact, but whales are actively trading to improve their positions and hold more ETH at a lower range. The new reserves may be used for staking, as Ethereum’s chain introduces larger staking deposits of up to 2,048 ETH.

For now, the renewal of whale buying is not enough to stop the rapid unraveling of ETH in the short term. The drive to protect lending vaults anticipates ETH sliding to a lower range, extending its 55% loss in the year to date.

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