The price of Ethereum (ETH) has experienced significant volatility, dropping below $2,000 in the early hours of March 11 and briefly falling to around $1,700. This marks its lowest level since October 2023, with a 10% decline recorded over the past 24 hours.
Market Performance: ETH vs. BTC
During last year’s bullish market—driven by the anticipation of a crypto-friendly Trump presidency—ETH reached an all-time high of $4,100. Currently, its price stands at less than half that peak.
In contrast, Bitcoin (BTC) surged past its previous record of $109,000 in the same bullish cycle, while Ethereum has yet to break its November 2021 all-time high of $4,800.
DeFi Market Impact
Ethereum hosts over 1,300 DeFi (Decentralized Finance) protocols, accounting for 57% of the total TVL (Total Value Locked)—approximately $70.5 billion. However, the chain’s DeFi TVL has decreased by 10% in a single day.
The recent ETH price drop has forced large-scale DeFi users to scramble to avoid liquidation.
A Close Call for One User
👉 How a DeFi user narrowly avoided a $16.5M penalty
A Sky (formerly MakerDAO) user, who has been leveraging the platform since 2021 to borrow DAI against ETH collateral, nearly faced a $16.5M penalty due to the price drop. At the last moment, they averted liquidation by depositing an additional 2,000 ETH from Bitfinex.
As ETH continued to plummet, the user:
- Added $1.5M USDT as extra collateral.
- Partially repaid their DAI loan.
According to DeFi Saver, the user’s liquidation price remains at $1,781 per ETH, leaving them in a precarious position.
Upcoming Developments
Pectra Upgrade
Ethereum’s next major upgrade, Pectra, is expected to introduce account abstraction via EOA (Externally Owned Accounts) rather than smart contracts.
ETH Staking in ETFs
In mid-March, the SEC began reviewing proposals for ETH staking in ETFs, signaling potential regulatory progress.
👉 Why Ethereum’s ETF staking proposal matters
FAQs
Q: Why did ETH drop below $2,000?
A: A combination of market volatility, DeFi liquidations, and macroeconomic factors contributed to the decline.
Q: How does Pectra improve Ethereum?
A: It streamlines account management, enhancing security and user experience.
Q: Will ETH staking in ETFs boost its price?
A: If approved, it could attract institutional investment, potentially stabilizing prices.
Conclusion
As ETH’s price slump and DeFi turbulence persist, Ethereum’s resilience—through upgrades and regulatory advancements—will be critical to watch.
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