ETH slips below $2k, traders spooked by liquidation rumors
ETH has fallen more than 8% as traders grow weary of rumors on social media saying the Ethereum Foundation will liquidate when the price falls to $1,100.
Rumors have been circulating among crypto traders on the social media platform X, with many speculating that the Ethereum Foundation could face a liquidation of up to $100 million if the price of Ethereum (ETH) falls further and hits $1,100.
“If the Ethereum Foundation gets liquidated at $1,100 to bottom us for the cycle surely that ends the simulation,” said one X account.
“The Ethereum Foundation getting liquidated at $1,100 will be this year’s FTX moment,” said one trader on X. However, the account also added that the EF would most likely “just add collateral” if it gets close to liquidating.
At press time, the Ethereum Foundation nor its co-founders have addressed these $100m liquidation rumors directly. However, the token has been on a downward trend. In the past week, ETH has gone down by nearly 10% in the past week and 28% in the past month.
According to data from crypto.news, ETH has fallen below the $2,000 threshold. It is currently down more than 8% and is trading hands at a price of $1,889. Yesterday on March 10, it fell even further down to as low as $1,791. The last time ETH fell below $2,000 was in late-2023.
What sparked the ETH liquidation rumors?
Most of the trader speculation surrounding a possible Ethereum Foundation liquidation sprouted because of a 30,098 ETH deposit into the Maker vault by a wallet suspected to belong to the Ethereum Foundation. Many saw this as a sign that the EF was preparing to liquidate its holdings. However, Ethereum developers Eric.eth and Sassal.eth have denied that the wallet address depositing 30,098 ETH to Maker owned by the Ethereum Foundation.
A Maker Vault is a smart contract used in the MakerDAO ecosystem on Ethereum that allows users to create and manage collateralized debt positions. The wallet currently holds 100,394.447 ETH as collateral, with a debt position of 78,035,224.7182 DAI and a liquidation price of $1,127.065.
Although the wallet was initially flagged by Arkham Intelligence as having ties to the Ethereum Foundation, on-chain data shows that initial funding for the wallet can be traced back to a trader named jonny.eth, an early Ethereum investor rather than the EF itself.
One possible reason why it was flagged as an EF wallet is the fact that it received a 4 million DAI transfer from the Ethereum Foundation ETH Sale back in May 2022.
