Ethereum, the second-largest cryptocurrency by market capitalization, is currently in freefall. Over $124 billion in capital vanished from the Ethereum (ETH) decentralized finance (DeFi) in six weeks. Seven months ago, ETH reached its highest value ever at $4,891.70 on November 16, 2021. But it is now trading at around $1,100, which is less than 75.2% of its all-time high value. Related Reading | Controlling The Chaos: FTX Exchange Bails Out BlockFi With $250M The start of 2022 was unstable for the cryptocurrency market, particularly ETH, but in previous weeks, things have become much more complicated. However, the larger crypto market continues to fall due to macroeconomic uncertainty fueled by an unstable stock market, interest rate hikes, and the fear of crisis. The Ethereum DeFi Market Is Deleveraging Dramatically Glassnode, a blockchain analytics firm, released a report on June 17. The report was titled “The Great DeFi Deleveraging.” The report stated that over $124 billion in the capital had been drained out in only six weeks from the Ethereum DeFi market. As a result, its market value is deleveraging rapidly. According to their statement, many reasons have sparked a wide range of margin calls, liquidations, and deleveraging. These reasons include worldwide monetary policy tightening, the growing strength of the US dollar, and decreasing values of risk assets. Their analysis looks at some early warning s...
