Storm Alert for Altcoin King! One of History's Greatest Purges Might Happen!

Famous crypto analyst and host of DataDash, Nicholas Merten, warned crypto investors of a potential significant liquidation that could push the price of altcoin king Ethereum (ETH) to very low levels.
Pay Attention to Debt-Loan Ratio
According to Merten, investors who are overly leveraged and use their ETH as collateral in decentralized finance (DeFi) protocols may have to close their positions if the price of Ethereum starts to drop. The analyst warned that this could trigger a significant drop in the price of ETH.
The analyst's main concern is the debt-to-loan ratio. If the value of Ethereum as collateral drops significantly, this rate will become unsustainable and investors will not have enough collateral to repay their loans, resulting in a mass liquidation unless they can refinance their loans.
Merten warned that many investors may not have the ability to refinance, which puts them at great risk of liquidation.
2 Possible Scenarios to See in Ethereum
Merten pointed out that the altcoin king needs to break the $2,000 resistance and more liquidity needs to flow into ETH to confirm the breakout in the ascending triangle formation. The analyst expects ETH to retest the $1,600 level if this resistance is not overcome. This scenario, laid out by Merten, could trigger a series of liquidations and have a gradual effect, pushing ETH even lower.
Despite existing measures such as the Ethereum Improvement Proposal (EIP) 1559 and inflation reduction, Merten believes that these will not be enough to save Ethereum from such a price drop. Merten's big liquidation prediction paints a cautionary picture for Ethereum's short-term future, highlighting the high volatility and risks associated with excessive borrowing in the DeFi market.
ETH, which was traded at $ 1,857 at the time the analyst shared his prediction, is changing hands at $ 1,831 with a decrease of 1.98 percent in the last 24 hours at the time of writing.
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