NewsletterEthereum (ETH) Price At $1,016 Will Cause Massive Liquidations, Here’s Why
The Ethereum (ETH) price is under pressure as it faces a massive selloff risk at $1016. Ethereum is currently trading at $1,064, down 13% in a day. The massive selloff will be caused by the liquidation of Three Arrows Capital as top lenders liquidate positions.
The wallet address marked as Three Arrows Capital on Nansen faces a liquidation risk of $264 million if the ETH price falls to $1016. It is actively repaying the AAVE debt.
Ethereum (ETH) Price at $1016 Will Liquidate 3AC
According to crypto analyst Onchain Wizard, a wallet marked as Three Arrows Capital on Nansen has been paying off its debt on AAVE V2 to avoid liquidation of its 223k ETH worth nearly $264 million. However, the collateralized position faces liquidation risk, if the ETH price falls to $1016. The wallet has a total debt of $198 million in USDT and USDC, with an 85% liquidity threshold.
The address uses USDT and USDC to repay the debt and withdraws ETH. Thereafter, Three Arrows Capital converts ETH to USDT or USDC through “sinofate.eth” and repays the debt on Aave V2. In fact, the address has sold nearly 50,000 ETH in the last 24 hours.
Moreover, Three Arrows Capital is liquidating its stETH holdings to ETH to repay its debt amid extreme market conditions. The hedge fund is one of the largest holders of stETH facing financial issues due to the Lido’s stETH depeg with the ETH. As the Ethereum Merge’s date remains uncertain, Three Arrows Capital is removing stETH.
Three Arrows Capital’s co-founder Zhu Su has come forward on Twitter to calm the conditions that originated as a result of liquidation risks. He said:
“We are in the process of communicating with relevant parties and fully committed to working this out.”
ETH Prices May Fall After the FOMC Meeting
Ethereum’s (ETH) price could fall further during the FOMC meeting as the Federal Reserve will possibly be raising the interest rate by 75 bps. Currently, the ETH price continues to drag downwards, falling 6% in an hour.
Ethereum and Bitcoin both face massive fall risks under $1000 and $19,000 levels, respectively. With ETH could fall to $750 and BTC is expected to dive to 13,000.
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