Ethereum Prices Plunge, Leading to Massive Liquidations on DeFi Platforms

NEW YORK, April 6 — The price of Ethereum (ETH) has plunged more than 14% in the past 24 hours, triggering significant liquidations across decentralized finance (DeFi) lending platforms. In a notable incident, one Ether investor, a so-called ‘whale’, saw a staggering loss of more than $100 million due to the crash.

The liquidation involved 67,570 ETH, valued around $106 million, after the asset’s price fell to $1,547, marking the lowest trading value since October 2023. This significant drop was linked to reactions in the broader crypto market, following announcements from U.S. President Donald Trump.

The affected investor’s position was liquidated on the DeFi lending platform Sky, which allows users to borrow the stablecoin DAI by providing ETH as collateral. According to data from Maker Vaults explorer DeFi Explore and on-chain analysis from Lookonchain, the liquidation occurred when the collateralization ratio fell to 144%, dipping below the minimum requirement due to the declining ETH price.

The Sky lending protocol operates with a typical overcollateralization ratio of 150% or higher, necessitating users to deposit at least $150 worth of ETH to borrow $100 worth of DAI. If the value of the ETH collateral decreases and falls below the necessary ratio, the position becomes eligible for liquidation.

In addition to the primary liquidation event, another significant player with a position of 56,995 wrapped ETH, worth approximately $91 million, is reportedly on the brink of liquidation as market conditions continue to deteriorate.

During a liquidation event, collateral seized from the user is auctioned to repay the borrowed amount plus any associated fees, with any remaining funds returned to the original borrower. The recent downturn reflects an alarming trend, as ETH now sits at 68% below its all-time high achieved in November 2021.

According to CoinGlass, liquidations have escalated rapidly, with 320,000 traders liquidated within the last 24 hours, leading to total losses nearing $1 billion. The majority of these liquidations involved ETH positions, highlighting the asset’s increased volatility in the current market climate.