The vice president of blockchain at Yuga Labs has cautioned that Ether’s value could plummet to as low as $200 in a prolonged bear market, representing a staggering 90% drop from its current levels.
In a post on March 11, the executive, who goes by the name “Quit,” countered predictions from analysts who suggested that $1,500 might serve as a floor for Ether (ETH). Instead, Quit asserted that a genuine bear market could witness ETH falling even further, akin to the trends observed in previous market cycles.
“If we’re just at the beginning of a true bear market, a target could be around ~$200-$400. That’s an 80% decline from here, leading to a total drawdown of 90% — consistent with historical bear markets.”
The executive mentioned feeling “comfortable” should the situation worsen. Quit advised his followers to think about selling their holdings if they are apprehensive about the asset’s potential decline.
Source: Quit
ETH holders weigh in on possible price movements
Quit’s remarks elicited varied responses from the cryptocurrency community. Some investors conceded that ETH might indeed spiral downwards, while others contended that such a scenario would necessitate a significant systemic failure.
One user pointed out they had considered $1,800 as the lowest point. However, when ETH hit that mark, they began to wonder if it could dip to $1,200. The ETH holder aligned with Quit’s forecast, saying, “It could very well go lower” if Bitcoin (BTC) rises to $66,000.
Conversely, another user disagreed with the prediction, asserting that a drop to those levels would only be conceivable in the event of a systemic collapse akin to that of 2018. This ETH investor remarked that, unlike earlier cycles, Ether has been embraced by institutions and now boasts a more developed ecosystem.
“It’s wise for investors to prepare for both scenarios, but being overly pessimistic at the wrong moment can be just as costly as being overly optimistic,” they noted.
Related: Four key developments needed for Ethereum to reclaim $2,600
ETH whales act to prevent liquidation risks
Quit’s comments coincided with movements from ETH whales aiming to avoid liquidation amid a significant decline in Ether prices. Recent data revealed that ETH had dipped to a low of $1,791, representing a 22% decrease over the past week.
In response to the swift price fluctuations, ETH whales transferred millions of dollars worth of ETH to safeguard their investments against possible liquidation.
The blockchain analytics firm Lookonchain noted a whale offloading $47.8 million while incurring a loss of $32 million to avert liquidation. This whale still holds over $64 million at the lending platform Aave, with a liquidation price set at $1,316.
Another ETH investor, who had already allocated over $5 million in assets to lower their liquidation threshold to $1,836, began to face liquidation. Lookonchain reported that the whale’s balance of $121 million was at risk as prices fell below $1,800.
A whale account, believed to be tied to the Ethereum Foundation, also injected $56 million in ETH to stave off liquidation during the price drop. This account deposited over 30,000 ETH into the Sky vault, resulting in a liquidation price adjustment to $1,127.14. Ultimately, it was confirmed that the account was not affiliated with the foundation.
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