Aave

Ethereum

Long

Lido DAO

DeFi

<p>Ethereum (ETH) proved resilient, easily bouncing above $3,000 after corrections in the past weeks. However, the token now sits in a risky space, within hundreds of dollars of a series of ETH liquidation levels.</p> 
<p>ETH traded around $3,070.30 on Tuesday, remaining within its tight range. Low-volume activity of around $13M in 24 hours is enough to keep ETH in its usual tight range. Liquidations are still happening across protocols and on centralized exchanges, despite precautions and automated mechanisms.</p> 
<div class="wp-block-image"> 
 <figure class="aligncenter">
  <img decoding="async" src="https://lh7-us.googleusercontent.com/kbp0F4uUv0pVFu0avjuE_miM3qS36H2GWXZX0yk0g5woPSIIqdCSvLCdQefJiyn0FR4hJlvKHVPBH_5OVCzyi3RSu_rtlx5VOgobRCNMVZM6JS1-0AGwiUvzGnvYkEOgpO55GtxxEU2RdPRbj1gHwAw=s320" alt="" title="">
 </figure>
</div> 
<p>But some price levels remain riskier than others. Decentralized protocols currently get sufficient support at many key price levels, but there are clusters that may be affected from relatively small corrections.</p> 
<p>Ethereum fluctuated easily between $2,900 and $3,300 in the past month, though sometimes showing significant short-term volatility.</p> 
<h2 class="wp-block-heading" id="h.gxwmecjifoqe">Aave Protocol Collateral to Liquidate Under $2,880.20</h2> 
<p>An immediate and large liquidation cluster is now close to current price levels on Aave protocol. Other vaults and DeFi services are holding collaterals at much lower ETH levels accrued over the past years.</p> 
<p>Currently, around 17,167 ETH are at risk for liquidation if prices drop under the collateral level of $2,880.20.</p> 
<p>In addition to Aave, Maker DAO is exposed to ETH risk through its vaults, and has a series of liquidation levels below $2,700.</p> 
<p>A single wallet with 9,232.50 ETH is at risk of liquidation at $2,714.92. Those wallets and vaults at risk often resort to DeFi Saver, attempting to alert and prevent liquidations.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
   <p lang="en" dir="ltr">Want to have multiple Aave positions owned by one account (EOA) right now?<br><br>Can do so very easily at defi saver (see screenshot)<br><br>Cool thing about is it that by using <a href="https://twitter.com/safe?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">@safe</a> as the smart wallet now, you'll also be able to manage any of these positions in the Aave interface if/when… <a href="https://t.co/RKlFiJCtXx" rel="nofollow" target="_blank">https://t.co/RKlFiJCtXx</a> <a href="https://t.co/hpHeoYR8OQ" rel="nofollow" target="_blank">pic.twitter.com/hpHeoYR8OQ</a></p>— nikola_j (🛟,🛟) (@_nikolajankovic) <a href="https://twitter.com/_nikolajankovic/status/1786023059008164046?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">May 2, 2024</a>
  </blockquote>
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
<p>DeFi Saver offers multiple vault controls through the Safe app, as a tool to monitor and automate DeFi risk exposure. ETH has shown it can easily dip to a lower range within a few days, often causing hundreds of millions of dollars in liquidations. One of the latest targets were Lido DAO addresses, which liquidated at the $3,080 range.</p> 
<p>In centralized trading, ETH liquidations remain relatively low, with mostly short positions liquidated in the past day.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
   <p lang="en" dir="ltr">🚨 $130M LIQUIDATED IN THE PAST DAY<br><br>53,376 traders were liquidated, with total liquidations reaching $130M.<br><br>The majority were short positions ($75M) compared to short positions ($55M). <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">$BTC</a> faced $39M in liquidations, while <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">$ETH</a> saw $25M. <a href="https://t.co/hACAKMieoH" rel="nofollow" target="_blank">pic.twitter.com/hACAKMieoH</a></p>— Satoshi Club (@esatoshiclub) <a href="https://twitter.com/esatoshiclub/status/1787459802148552851?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">May 6, 2024</a>
  </blockquote>
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
<p>The past week was relatively stressful for traders, exposing the additional complexity of risk management tools.</p> 
<h2 class="wp-block-heading" id="h.q9fs07ld4kd4">DeFi and LRT Have Sufficient Collaterals</h2> 
<p>One of the risks of early DeFi were the deep liquidations which cost many traders their collaterals. Currently, the Ethereum ecosystem is also padded by Liquid Staking Tokens, which often deviate from the price of ETH on exchanges, and may keep the ecosystem safer from liquidations.</p> 
<p>The recent market events were also far from previous series of $1B or more in liquidations daily.</p> 
<p>The Ethereum decentralized ecosystem is returning with a force in 2024. Various projects contain more than $54B in notional value, while producing $2.78M in fees each day. Nearly $25M in value enter Ethereum DeFi every day.</p> 
<h2 class="wp-block-heading" id="h.508asuvx13yj">ETH Traders Put Weight on Long Positions</h2> 
<p>Short liquidations diminished on&nbsp;<a href="https://www.google.com/url?q=https://www.google.com/url?q%3Dhttps://www.binance.com/en/markets?ref%253D16863683%26amp;sa%3DD%26amp;source%3Deditors%26amp;ust%3D1715078040794737%26amp;usg%3DAOvVaw0FLe5yav5Zlb_hR1sff4QO&amp;sa=D&amp;source=docs&amp;ust=1715078040801935&amp;usg=AOvVaw0j1uecF05mp5ioMAU6v9m5" rel="nofollow noopener" target="_blank">Binance</a>&nbsp;in the past few days. However, open interest on the ETHUSDT perpetual futures is growing.</p> 
<p><a href="https://www.google.com/url?q=https://www.google.com/url?q%3Dhttps://www.binance.com/en/futures/funding-history/perpetual/trading-data%26amp;sa%3DD%26amp;source%3Deditors%26amp;ust%3D1715078040795212%26amp;usg%3DAOvVaw0VXn3bHwBW9RHz9sYfxNfm&amp;sa=D&amp;source=docs&amp;ust=1715078040802041&amp;usg=AOvVaw1emSMTrrNQZqI6U5NYJYIF" rel="nofollow noopener" target="_blank">Open interest</a>&nbsp;grew in the range of a day, up to $2.1B in notional value. Long positions dominated at more than 77.93% of all open interest, while market takers were predominantly buying ETH.</p> 
<p>Exchange reserves for ETH also indicate interest in withdrawals and buying. In the past 6-8 weeks, ETH reserves have been falling slowly, sliding under $13B in value. Peak selling happened at above $4,000 and since then, there are signs of accumulation.</p> 
<p>Ethereum is still used in re-staking. The Eigen protocol increased and consolidated its holdings&nbsp;<a href="https://www.google.com/url?q=https://www.google.com/url?q%3Dhttps://defillama.com/protocol/eigenlayer%2523information%26amp;sa%3DD%26amp;source%3Deditors%26amp;ust%3D1715078040795855%26amp;usg%3DAOvVaw0rJWwHxlnilrnS8d_IC0b8&amp;sa=D&amp;source=docs&amp;ust=1715078040802201&amp;usg=AOvVaw34Hz5S4w5tulGse8iOGT7N" rel="nofollow noopener" target="_blank">above $15B</a>&nbsp;in total value locked. Physical ETH tokens are still needed for staking, as well as for vaults and collateral wallets.</p> 
<p>On the other hand, the trend may reverse, as some whales may still seek to sell some of their ETH.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
   <p lang="en" dir="ltr">🚨 🚨 🚨 🚨 25,772 <a href="https://twitter.com/hashtag/ETH?src=hash&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">#ETH</a> (79,181,879 USD) transferred from unknown wallet to Coinbase Institutional<a href="https://t.co/cLH0r9YdWZ" rel="nofollow" target="_blank">https://t.co/cLH0r9YdWZ</a></p>— Whale Alert (@whale_alert) <a href="https://twitter.com/whale_alert/status/1787546588945977517?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">May 6, 2024</a>
  </blockquote>
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
<p>Recently, wallet watchers also noticed one of the older pre-mine addresses move ETH for the first time in nearly nine years.</p>

ETH Liquidation: 17K Tokens on Aave Protocol at Risk in the $2,800 Range

Table of Contents

Cryptopolitan_News

Other articles published on May 7, 2024

European Market Now Allows Crypto for Property Deals and Paying Taxes

India’s Central Bank Enhances Offline Transfer Capabilities for Digital Currency

Bitcoin (BTC) Predictions: Bull or Bear Market? Experts Weigh In

Here’s How the U.S. Government’s Bitcoin Holdings Reached $13.82 Billion

VeChain Poised for Significant Gains: Will the Next Rally Pump VET by 134%?

Exploring Beyond Bitcoin: Spotlight on Trending Cryptocurrencies (BTC)

Join our free newsletter for daily crypto updates!