Ethereum News Update: Crypto Whales Employ Flash Loans to Manage Market Fluctuations and Prevent Liquidation
- Ethereum-based whale avoided liquidation by selling 465.4 WBTC/2,686 ETH ($56.52M) to repay flash loans amid Nov 5 market crash. - ETH dropped below $3,400 for first time since June 2024, triggering $1.1B+ in liquidations as 303,000 traders exited leveraged positions. - Similar strategy seen earlier when nemorino.eth sold 8,000 ETH via flash loan to secure $7.58M profit during downturn. - Analysts highlight systemic risks in leveraged trading, noting disciplined deleveraging via flash loans is critical d
On November 5, a prominent Ethereum-based whale made a bold move to prevent liquidation as the cryptocurrency market experienced a sharp downturn. This investor, who had a leveraged long position of 1,320 WBTC (valued at $132 million at that moment), sold off 465.4 WBTC and 2,686 ETH for a total of $56.52 million. The sale was used to settle a flash loan and secure their position during the turbulent price swings, according to
This wave of market volatility was triggered by a widespread selloff that dragged Ethereum below $3,400 for the first time since June 2024, wiping out all its gains for the year and causing a 7% drop in a single day. Liquidations surpassed $1.1 billion, forcing over 303,000 traders to close their positions as leveraged longs unraveled. Bitcoin also fell close to $100,000, putting additional strain on portfolios with high leverage. Experts pointed out that the simultaneous declines revealed systemic risks tied to leveraged trading, especially for major players using flash loans to boost their positions; these issues were further explored in the BeInCrypto article.
The WBTC whale’s strategy echoed similar maneuvers in the Ethereum market earlier that week. On November 4, another major holder, nemorino.eth, used a flash loan to sell 8,000 ETH and pay off a $24.83 million debt, earning a $7.58 million profit during the market slump. This example highlights how large investors are increasingly turning to institutional-level liquidity solutions to manage volatility, with flash loans allowing for swift deleveraging without triggering forced sales, as detailed in
These tactics carry broader consequences for the market. As the crypto sector becomes more dominated by institutions, tools like flash loans and on-chain analytics are transforming how risks are managed. Yet, the recent surge in large-scale liquidations has also revealed weaknesses in leveraged positions, especially as margin requirements become stricter during rapid price drops. On-chain analyst Yu Jin pointed out in
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