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This weekend’s sell-off has pushed Ethereum’s year-to-date losses to 55.3%, which is almost 9% more than what Solana (SOL) has lost during this same period and 33% higher than BNB’s retreat.
Meanwhile, Ethereum’s stance as the largest DeFi ecosystem by total value locked (TVL) and other metrics typically exacerbates its losses during sharp downturns like this as the token is used as collateral to back leveraged positions.
Once the price dives below certain levels, these liquidations typically accelerate the decline for ETH.
Data from DeFi Llama indicates that another 9% decline could result in nearly $70 million worth of ETH being dumped. This is not much compared to the huge volumes seen lately but it would still depress the price of the token as further supply will be unlocked.
ETH Could Bounce Back Strongly
As we anticipated in a previous ETH price prediction, a break below the $1,750 would result in a big drop for the token. Both the bearish breakout and this expected decline occurred quite rapidly during the weekend as investors panicked.
The Fear and Greed Index has dropped once again to its record low of 17, indicating that market participants are in Extreme Fear.
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