A major cryptocurrency whale that deposited over $40 million worth of the second-largest cryptocurrency Ethereum ($ETH) into a lending protocol to borrow stablecoins is currently risking being liquidated and becoming a forced seller over the recent crypto market decline.
According to on-chain analysis firm Lookonchain, the whale deposited 12,734 ETH to lending protocol Compound, at the time worth $40 million, to then borrow $31.4 million worth of stablecoins. They’re now nearing liquidations as their health rate has dropped to 1.06, and will be liquidated once the price of ETH drops to $2,984.
Ethereum is at the time of writing trading at around $3,125 after losing over 4.8% of its value in the last 24-hour period and more than 16.8% in the last 30 days amid a wider cryptocurrency market downturn that has seen Bitcoin drop below the $60,000 mark.
Notably, long-term Ethereum investors are now holding around 78% of the cryptocurrency’s circulating supply, which means that buyers who have been holding onto their funds for more than a year now control the majority of circulating ETH.
hat’s according to data from on-chain analysis firm IntoTheBlock, which revealed that long-term holders (LTH) recently added more to their wallets as the price of the cryptocurrency dropped amid a wider market downturn.
These long-term investors are less likely to sell their coins compared to those who have held them for a shorter period. The trend of LTH dominance is seen as a bullish sign for Ethereum, suggesting growing confidence among investors, with the significant concentration they now have effectively taking a significant amount of the cryptocurrency out of circulation, limiting potential downward pressure on the price.
Nevertheless those investing in Ethereum-focused investment products appear to be dropping the cryptocurrency, with data showing that last week these products saw over $60 million outflows, the largest in nearly two years.
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