Ethereum (ETH) must hold this level to avoid plummet due to the domino effect.

The market sentiment for cryptocurrencies is turning negative as Ethereum (ETH) and Bitcoin (BTC) have sharply declined in the past 24 hours. In particular, Ethereum has dropped by as much as 7%, reaching a critical level that could determine the next trend for this asset.

Breaking this level could lead to a major sell-off as nearly 320 million USD in DeFi loans are at risk of liquidation.

Technical Analysis of ETH and Important Price Levels Ahead

According to technical analysis experts, the sharp decline has brought Ethereum back to the $1,820 area – this is the second time this month that ETH has tested this level. However, increasing selling pressure has weakened the support zone, raising the risk that ETH could continue to fall.

ETH/USDT daily chart | Source: TradingViewBased on recent price action and historical data, if ETH cannot hold above $1,820 and closes the daily candle below $1,800, this coin could drop another 18%, bringing the price down to the $1,490 range in the coming days.

On the weekly timeframe, Ethereum continues to maintain a bearish trend as it trades below the (EMA) 200-day exponential moving average. Although there was a recovery momentum at the beginning of March 2025, after failing to hold the crucial resistance zone, ETH now faces the risk of a deeper decline.

If the current trend continues, ETH could open a decline down to $1,200, or even lower.

! Daily ETH/USDT Chart | Source: TradingView## Nearly $320 million in DeFi loans at risk of liquidation

On-chain data shows that the prolonged downtrend of Ethereum is driving hundreds of millions of USD in leveraged DeFi positions close to liquidation thresholds.

According to the DefiLlama analytics platform, there are currently approximately 319.8 million USD in Ethereum collateralized loans that are only about 20% away from the liquidation threshold.

Source: DefiLlamaMost of these risky positions are concentrated in the top DeFi lending protocols, particularly MakerDAO and Compound.

Specifically, data indicates that if the price of Ethereum drops below $1,800 and approaches the $1,750 level, about $246 million in collateral assets could be liquidated. Of this, MakerDAO accounts for up to $229 million, while Compound users are at risk of losing about $17 million.

Currently, ETH is trading around $1,892. If ETH continues to drop by 19% from here, the collateral will enter a danger zone, triggering a cascading liquidation effect. This will not only directly affect borrowers but could also cause a significant shock to the entire DeFi ecosystem.

The chain liquidation effect occurs when prices drop sharply, causing a large number of positions to be liquidated, creating greater selling pressure and leading to subsequent liquidations. This domino effect can lead to a large-scale sell-off, increasing market volatility.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.

• Bitcoin ETF recorded its first inflow after several weeks, while ETH outflows continue.
• Whales rush to buy the dip when ETH falls below $2,000

SN_Nour

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