- ETH whale vaults near liquidation as two large Maker vaults holding 125,603 ETH risk forced sell-off at key price levels.
- ETH drops below key support after a 6.72 percent decline breaking below $2,200 and nearing a crucial long-term trendline.
- Liquidation may fuel volatility as a forced sell-off could flood the market with ETH increasing selling pressure and price swings.
Wu Blockchain reports that two massive ETH vaults on Maker are nearing liquidation. These vaults hold a combined 125,603 ETH, valued at approximately $238 million. As ETH’s price drops, the health ratio of these positions has fallen to 1.07.
The levels for critical liquidation are $1,805 and $1,787. An influx of ETH into the market may result from automated liquidations if the price falls below these thresholds. Increased selling pressure may therefore push prices lower, escalating volatility.
ETH Price Struggles Below Key Support
The ETHUSD perpetual contract recently fell 6.72%, trading at $1,870.01. The decline led to breakdown below the $2,200 support level. Previously, this zone provided strong support during past price movements. However, bearish momentum has prevailed, pushing ETH toward lower support zones.
The price is now getting close to a long-term rising trendline that started in the lows of 2022. On multiple instances, this trendline has been a crucial support point. A possible reversal can occur if the price stays above this trendline. The next crucial support levels, however, are $1,670 and $1,450, should ETH drop below. If these levels are not maintained, additional downward momentum may be accelerated.
Increased Volatility and Market Impact
If liquidation occurs, the sudden release of ETH could heighten market turbulence. Additionally, the increased supply could drive prices lower, unsettling traders. Such market dynamics typically lead to rapid price fluctuations as participants react to changing conditions.
Moreover, the broader trend reveals a weakening bullish structure with consistent lower highs. Sellers maintain control while ETH struggles to reclaim lost ground. Hence, the market remains under pressure as ETH trades beneath previous support.
Market participants are closely monitoring these key levels. The outcome will shape near-term price direction and market sentiment. Besides, any break below the critical supports could trigger further liquidations, intensifying the downward spiral. Furthermore, if ETH stabilizes above the ascending trendline, optimism for a rebound may return. However, the looming threat of liquidation keeps the market on edge.
