In a dramatic turn of events, a crypto whale recently executed a multimillion-dollar sell-off of Ethereum (ETH) to settle debt, only to incur a massive loss in the process.
As per the on-chain analytics platform LookOnChain, the whale liquidated a substantial 10,701 ETH, valued at over $33 million, on Tuesday to meet financial obligations. However, the move resulted in an additional loss of approximately $4 million, adding to the already significant debt.
This whale sold all 10,701 $ETH($33M) on #Binance to repay debt 2 hours ago, losing more than $4M again!
He went long $ETH by depositing $ETH on #Compound and borrowing $USDT to buy more $ETH.
This is his second time losing money by going long $ETH.
Last time he lost ~$500K. pic.twitter.com/rVM3xB3GmR
— Lookonchain (@lookonchain) April 16, 2024
The whale’s strategy was to initiate a long position on ETH by leveraging the Compound blockchain. They deposited ETH and borrowed USDT coins to increase their exposure to ETH, aiming to profit from a bullish market sentiment surrounding Ethereum. However, the market took an unexpected turn, leading to a reverse in their fortunes.
This unfortunate incident marks the second time the crypto whale has suffered losses due to entering a long position on Ethereum. Per LookOnChain’s report, a similar scenario occurred previously, and it resulted in a loss of around $500,000 from the whale’s portfolio.
This previous loss incident, reported by LookOnChain on March 25, unfolded when the whale deposited 11,275 ETH (equivalent to $37.4 million) into Binance. Taking advantage of a surge in the coin’s price, they withdrew 9,092 ETH (worth approximately $31.7 million) from Binance and subsequently borrowed an additional $18 million to acquire more ETH.
Meanwhile, Ethereum’s market performance appears to indicate a bearish trend. Over the past week, Ethereum’s market capitalization has experienced a notable decline, dropping from a peak of $433.37 billion to a low of $345.78 billion on April 13.
Although there has been some consolidation since then, with the market cap rebounding to $391.83 billion on Monday, April 15, the current market cap stands at approximately $368.09 billion, reflecting a 5.60% decrease from the previous day.
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