The red numbers dragged sales in Compound, Aave (V1 V2) and bZx.
Despite the stumble, ETH shows a 6% expansion in the last 14 days.
The cryptocurrency market experienced a “red Monday” on February 22 with most projects trading lower. One of the most significant drops was that of ether (ETH), the cryptoasset of the Ethereum network.
The cryptocurrency fell 15% in the last hours, which led to million-dollar liquidations in DeFi loans (decentralized finance). According to data from DeBank, cited by Coindesk, in 24 hours about 25 million dollars were settled in this category.
The platforms that registered the highest levels of settlement were: Compound with almost 14 million dollars (57%), Aave (V1 V2) with another $ 8 million, bZx ($ 1.1 million), Maker ($ 842,000) and Cream ($ 342,000).
“This was still a ‘small’ move and we still saw gas (fees) skyrocket to crazy levels despite Binance disabling all withdrawals from the exchange. I wonder what would happen to a movement like the one we had in March, “explained an operator who preferred not to reveal his identity.
The March movement to which the operator refers occurred after the World Health Organization (WHO) decreed a pandemic due to the SARS-CoV-2 coronavirus and the COVID-19 disease. The cryptocurrency market suffered with bitcoin losing 40%. The announcement at the time caused BTC to drop below $ 4,000.
High commissions on Ethereum
Regarding the commissions that the operators of the Ethereum network must pay for carrying out their transactions with ethers, the site etherscan.io shows that a The operation could cost them between $ 14 and $ 21. Depending on the platform to be used, the cost of mobilizing funds may be higher.
The ETH downturn produced an unusual volume of loan repayments in DeFi. In November there was also a high liquidation for more than 93 million dollars. Source: Debank.
Blockchair metrics show that this Monday rates reached as high as $ 34, a reason that would also have put pressure on the liquidation of loans in the DeFi. At the time of publishing this article, the price of ETH was $ 1,723 per unit, while the slump occurred just two days after the cryptocurrency reached its all-time high of $ 2,042, according to figures from CoinGecko.
A report released by CriptoNoticias today February 22 indicates that the price variations in the market will continue. For analyst Willy Woo, bitcoin, as the main cryptocurrency in the market, is in a phase of price consolidation.
The downturn would be a market correction before reaching much higher levels. Preliminary estimates predict that the crypto asset could hit $ 100,000 this year, an unthinkable price until a few months ago.
Loans in DeFi are operations in which a user obtains funds after collateralizing a guarantee in ETH, for example, or another available cryptocurrency. It is also possible to obtain returns by blocking funds or injecting them as capital to offer loans.
In January it was reported that a bitcoin crash caused an all-time record of liquidations for traders on Binance. Some 190 million dollars were liquidated from the long or long positions.