According to Lookonchain, a significant Ethereum whale recently purchased 25,674 ETH, but this move carries potential risks if the price of ETH drops below a specific threshold, leading to a liquidation event.
It is evident that the whale acquired the ETH from MakerDAO, a decentralized lending platform that enables users to generate stablecoins (DAI) by securing their crypto assets as collateral.
Lookonchain also reveals that the whale spent 61 million DAI to buy 25,674 ETH, and later sold 5,851 ETH for 14 million DAI, resulting in a profit of approximately $99,000. Despite the profits, the whale faces the looming threat of liquidation if the ETH price falls below a certain level, leaving their collateral insufficient to cover their debt.
At present, the healthy ratio on MakerDAO is as low as 1.03, and if the price of ETH drops to $2,257, the whale may face the risk of liquidation.
CoinMarketCap data shows that the price of Ethereum has fallen by 3.56% in the last 24 hours, currently trading at $2,280, close to the threshold of concern. If today ends with a decline, it will mark the third consecutive day of losses for ETH. Although the price dipped to intraday lows of $2,255 on Dec. 29, it has since maintained above the day’s lows of $2,267.
The future of the whale’s investment is intertwined with the performance of ETH and the broader crypto market, which is currently experiencing a downturn as investors secure year-end profits. Therefore, the whale must closely monitor the market conditions and make strategic decisions based on evolving trends.
