ETH Faces Liquidation Threat as Two Major Whales Near Crisis Point on MakerDAO

Ethereum’s ($ETH) price is once again in the spotlight, and for two whales that hold a combined 125,603 ETH (worth approximately $229 million, anyway) on MakerDAO, we very seriously hope that the price of ETH holds above $1,787.75 and $1,701.54, respectively.

Because if not, those positions will get liquidated, and that’s liable to create all the same kinds of market shockwaves associated with liquidation events: rising ETH supply, falling ETH price, and also quite possibly some event-driven volatility in MakerDAO’s DAI.

Even though the Ethereum market has seen major liquidations in the past, each time the asset has shown resilience and managed to bounce back. This latest development raises crucial questions about the ETH market’s stability and whether or not these whales will step in to prevent further price declines or if a broader cascade of liquidations is imminent.

The Threat of Liquidation: Will ETH See a Sell-Off?

The two whales in question presently hold a large share of ETH on MakerDAO, a well-liked decentralized lending protocol. The positions of these whales are now in danger of being liquidated if ETH’s price keeps sliding. At the current price levels, a drop to either $1,787.75 or $1,701.54 would trigger a forced sale of their holdings.

The $ETH liquidation threat is very real—but whether it actually happens depends on price action.
The two whales holding 125,603 ETH ($229M) on MakerDAO are dangerously close to #liquidation . If ETH drops to $1,787.75 and $1,701.54, their positions will be force-sold, pic.twitter.com/ha56C360wE

— EyeOnChain (@EyeOnChain) March 31, 2025

In the decentralized finance (DeFi) sector, one of the most well-known platforms is MakerDAO. It enables users to take out loans. But the twist is that these loans are only made against collateral. The most common form of collateral is ETH. When ETH’s price drops, and it drops a lot below certain thresholds, the Maker collateral backing the DAI stablecoin becomes insufficient. At that point, the Maker system kicks in and starts liquidating the loans. And what we’ve seen is that in recent days, due to certain whales holding vast amounts of DAI, the amount of ETH hitting the market has been significant.

This situation is worrisome for ETH holders, as the possibility of liquidation by these whales could send their ETH into the open market. And from what we know about ETH in the current market, sending a ton of it into the open market in a short period of time could have devastating price effects. Once those price effects ripple through the rest of the market, it won’t take much for panic to set in. And then those cascading liquidation effects we mentioned earlier will start to happen.

Even under today’s market duress, it must be said that Ethereum is a survivor. Major financial liquidations have wracked the Ethereum community before this month, and each time, Ethereum—not always gracefully—has emerged intact and continued on an upward price path. This historical responsiveness has some market participants obsolete with hope that Ethereum will surge again.

Crypto Twitter and Speculation: Is It Too Soon to Write Off ETH?

Observers of the turmoil possible in the markets take to social media to offer opinions and even comic relief. One seems to have gone too far when tweeting for crypto. Or maybe that is just part of the comic facade of being a crypto founder.

At left, in a tweet that is supposedly humorous, a divine dog from heaven poses in an igloo, and a heavenly E.T. gives a thumbs down while presiding over the impending doom of Ethereum.

Remembering that cryptocurrency markets, especially ETH, are driven by emotion and a combination of fear, greed, and speculative sentiment is crucial. Yes, the liquidation of large, nice round numbers, E, that could lead to downward pressure on: ETH. But hey, it’s far too early to pronounce the end of Ethereum’s growth. Other things are happening in the market besides the liquidation of these large positions:

Ongoing enhancements, like the transition to Ethereum 2.0, ensure Ethereum’s evolution continues apace. Compared to the original Ethereum network, Ethereum 2.0 is forecasted to be far more scalable and far more energy-efficient. Indeed, many if not most developments in the blockchain world seem to suggest that the position of Ethereum in the broader ecosystem remains secure.

The Key Question: Will Whales Step In to Buy the Dip?

Is Ethereum on the brink of potential liquidation? Anyone’s mind could be filled with that question. Across the board, there’s a ton of spills and fills. And into these spilt and filled minds, the question of whether whales will step in to buy the dip and prevent a larger sell-off spills out. In past market downturns, whales are said to have been known to accumulate large amounts of ETH at lower price points, capitalizing on the opportunity to buy discounted assets. If the price of ETH continues to decline and hits the liquidation thresholds, might there be an influx from these major players into buying ETH? Could that buying pressure help stabilize the market and reverse the downward trend?

Whales make up a large portion of the market for ETH. They buy up big amounts and in that way store or hold the asset. At least we think they do. Who are these whales? Some of them are early Ethereum investors and developers, some of whom receive millions in funding and also make use of Ethereum in their businesses. At least they did before the bear market hit.

What will happen next in this situation is anything but certain, and the next few days will surely be of utmost importance in deciding which way ETH’s price will go. Although many still have faith in Ethereum’s long-term trajectory, the price dynamics in the short-term seem as if they could play a pivotal role in determining the immediate future of the asset.

Conclusion: Is It Too Early to Panic?

Although the possibility of liquidation exists, we cannot let this prospect overwhelm us. We must look at the situation in a calm and collected manner. Let us not forget that Ethereum has weathered storms before—dangerous storms—that were enough to sink other projects. And somehow, Ethereum always manages to come back. The question, then, is whether this price drop is something that is going to create a danger zone for us ETH holders, or if it is just another storm that will blow over. Liquidation is only one part of the story, and it is one that’s being told against a backdrop of adverse crypto market conditions.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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