by Aima Raza
Ethereum’s market slide worries DeFi experts because they predict this price loss will push many DeFi liquidations into effect. As Kevin Rusher, RAAC platform founder, explains, a 20% ETH price drop will trigger $336 million worth of DeFi loan liquidations.
Traders should focus on the price points highlighted by Rusher. A drop in Ethereum price to $1,857 will create around $136 million worth of liquidations. The additional $117 million worth of liquidations would help press down the market when Ethereum reaches $1,780. ETH could drop to $1,500 according to him and this would force $336 million in sales that would drive markets down further.
Ethereum Faces Liquidation Threat
Defi platforms see high risk from liquidations due to their regular use of leveraged trading strategies. Ethereum acts as loan collateral although traders have to sell their position if the currency drops below necessary value limits. Market turbulence typical occurs after these events and pushes prices down further.
According to Rusher, bringing real estate and gold into DeFi can help reduce the problems created by excessive leverage. He wants traditional stable assets like real estate and precious metals to ease market volatility by protecting crypto investors from automatic sell-offs.
“The main catalyst of this crisis is a single $130m ETH-backed loan in Sky, formerly Maker, which is on the verge of collapse despite the borrower scrambling to add more collateral. Every cycle, crypto-backed loans suffer from extreme volatility, leading to cascading liquidations that crash the price of assets.”
Ethereum showed disappointing returns last few weeks by hitting price lows not seen since multiple year periods. Several experts predict ETH can lose another 30% against Bitcoin while others say ETH will bottom at $1,600 level.
Ethereum Traders Shift Focus
ETH has lost more than 15% of value during the previous week and remained under its 200-day exponential moving average since February. The market technical signals show signs of weakness. The market may experience a price rise as the RSI reading approaches 31 which signifies an upcoming oversold level for Ethereum. 
The downturn of Ethereum pushes traders into searching for better profit opportunities in alternative crypto assets. In his latest social media update market analyst Alex Krüger urged traders to put their Ethereum funds into altcoins performing well at present. Krüger made his recommendation about trading ETH for other altcoins on March 12 according to his tweet.
If still stuck on ETH likely a good time to dump it to buy a higher beta altcoin. If the market goes down you'll likely lose equally in both cases but if it goes up you'll likely outperform significantly and can then swap into BTC. Opinion not advice. Pick your own poison.
— Alex Krüger (@krugermacro) March 12, 2025
People see negative market trends yet the core value of Ethereum remains secure. As DeFi and NFT continue to depend on Ethereum support, the blockchain’s upcoming scalability enhancements and stake updates may provide long-term growth opportunities.
The short-term situation remains unclear since ETH meets vigorous selling pressures and runs the risk of more liquidation events. Participants in the crypto market pay attention to key price zones during market shifts and new declines would create selling pressure throughout the entire market.
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