Most investors in the crypto market have been feeling the heat ever since digital assets like Ethereum began their downtrend. Being more than 70% down from its all-time high, it’s no secret that a good number of investors are held holding Ethereum bags that are currently in the loss. However, there are some that have been hit incredibly hard in this market. Mostly due to the absolutely degenerate positions that they have taken in the market.
With the price of Ethereum falling below $1,000 has come a number of not-so-good implications for those invested in the cryptocurrency. While some have just held the coins and as such have seen the dollar value of their holdings plummet, others have usually taken a riskier route which has led to massive losses for them.
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One of these is a wallet that held more than 71,800 in a collateral position on a decentralized borrowing protocol known as Liquity. The liquidation value for this position had been Ethereum had just under $1,000 and when the digital asset had declined to this point, the wallet had lost all of its ETH.
A report from Wu Blockchain shows that the position was liquidated at a price of $927.13 at 19:39 UTC on March 18th. A total of 71,683.47 ETH had been liquidated at this price, and at the time of the liquidation, it was worth over $66 million.
ETH price recovers above $1,100 | Source: ETHUSD on TradingView.com
This has set a new record for the largest single liquidation in the history of the Ethereum network. A simple reason for this was that the owner(s) of the said wallet was probably unable to add more funds to push back their liquidation price. Hence, could no longer provide collateral for loans, leading to such a loss.
June 18th was one of the hardest days for investors who are holding Ethereum. So far, it has been the day with some of the largest liquidations due to how much the price had dropped in a matter of hours. After the record liquidation, the price of the digital asset did not stop dropping at this point. Ethereum had gone on to drop below $900 on the same day and had hit its lowest point at $880 before bouncing back up once again.
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Since then, the price of the digital asset has recovered significantly. It has now pushed past the $1,100 resistance level to be trading comfortably at $1,121 at the time of this writing. This has brought some much-needed positive sentiment back into the market but it could be short-lived.
A recovery such as this can usually turn out to be what is known as a “bull trap”. This is when the price of a digital asset recovers quickly, sparking faith that it will keep going up, and thus, more investors put money into the market. However, the tides can quickly change and the downtrend may continue.
Featured image from NewsBTC, chart from TradingView.com
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