Introduction
On the morning of April 7, crypto traders witnessed a sharp selloff sweeping through the entire market. The total digital asset market capitalization dropped by around 10%, pushing many major tokens – including ETH – to multi-year lows since January 2023. According to data from CoinGlass, over $1.6 billion worth of leveraged positions were liquidated within just 24 hours. The actual figure may be even higher due to exchange API limitations.
ETH hit its lowest point in two years, dropping to 1,415 USD on April 7 before slightly recovering to 1,562 USD. As of now, ETH has rebounded further, trading around 1,607 USD.
DeFi Investors Scramble to Protect Positions
As ETH slipped below the critical 1,500 USD level, many investors rushed to protect their leveraged positions. According to Lookonchain, one whale deposited 10,000 ETH (worth about 15 million USD) into the lending platform Sky to prevent liquidation of a 340 million USD position. However, if ETH continues to fall below 1,119 USD, the investor risks losing up to 220,000 ETH.
DefiLlama data indicates that investors could liquidate as much as 600 million USD in ETH-backed positions if ETH drops below 900 USD. On April 6, another whale lost 67,570 ETH after ETH fell 14%, resulting in an estimated loss of 106 million USD.
Selloff driven by global macro factors
According to Darren Chu, an analyst at BRN, the selloff stemmed from negative sentiment across global financial markets – particularly due to record-high U.S. tariffs announced by the Trump administration over the weekend. Risk assets saw sharp declines early in the week as investors sought safety in assets like gold and U.S. government bonds.
Dr. Kirill Kretov from CoinPanel commented: “We are facing a period of extreme global uncertainty — escalating trade tensions, geopolitical flashpoints, and conflicting economic signals are all converging.” In this context, cryptocurrencies – especially altcoins like ETH – are under significant pressure.
Rumors of a potential 90-day tariff delay temporarily lifted market sentiment earlier in the session, but the White House quickly debunked them. The S&P 500 lost 7 trillion USD in market value in just 30 minutes, officially entering bear market territory for the first time in three years.
Hope for a technical rebound
Despite the grim outlook, some experts still see opportunity. Kevin Rusher from the RAAC platform said: “Just a few months ago, ETH below 1,500 USD was unthinkable. But now, this could be a generational buying opportunity into a fundamentally solid ecosystem.”
According to BRN, risk assets are currently oversold, and a technical rebound – or “Dead Cat Bounce” – could happen as early as this week. Key economic events to watch include: the FOMC meeting minutes, CPI, jobless claims, PPI, and preliminary U.S. consumer sentiment and inflation expectations.
