Ethereum Experiences Worst One-Day Return In History

Ethereum experiences the worst one-day return in the history of the coin and its price even neared the zero level. The ETH correction arrived fast and made all of the recent gains for ETH vanish as we are reading in the following ETH news.

ETH has been increasingly volatile over its trading history and even raised some expectations of correcting the price further. At the start of 2020, Ethereum became of the best-performing altcoins on the market but the recent crash somehow destroyed the optimism, right after the traders decided to sell everything and cause huge network congestion. The crash deleted about 45 percent off the Etheruem price in the past week which sent the coin down to $127. The volumes after the sell-off reached $30 billion which was a peak activity for ETH. The slide of Ethereum brought trouble for the entire crypto ecosystem and caused liquidation in DeFi collateralized lending.

The liquidations were made worse by the double bind of slipping ETH market prices as well as the congested network, as one Twitter user explained:

 ‘’ I say it reluctantly but the real problem yesterday was @ethereum, the congested network and the skyrocketing fees blocked all the decentralized mechanisms of the #DeFi.  We are still far from having a solution that can be used effectively on a large scale.’’

The major sell-off didn’t crash entirely nor did it crash the collateralized lending sector but it did send the entire crypto market into a shock. For example, Ethereum experiences a price fall, Maker dropped by more than 39 percent in one day and more than 53 percent in one week, dropping to $259. The DAI Trading space also allowed for further exploiting by traders where the price crash leads to zero-price auctions which will be won by fast participants.

The collateral vaults were also liquidated and taken over which eventually opened a 3.5-hour window in which the single player has a limited right to purchase vaults that will trigger liquidations. The bot was capable of bidding zero price levels for the vaults and even won the auctions while the others didn’t have the chance because of the Ethereum network congestion. The recent crash was spectacular because it happened instantly based on the panic in both crypto and traditional markets. ETH also dropped on a larger time scale and reached a level that was seen previously in 2019.