A popular analyst is issuing a dire warning to Ethereum (ETH) holders, saying that an epic collapse could be coming for the second-largest crypto by market cap.
In a new video, crypto strategist Nicholas Merten tells his 511,000 YouTube subscribers that Ethereum has major skeletons in the closet that could see ETH lose as much as 75% of its value from its current price of $1,220.
“Our target range for Ethereum is around $300 to $500. I don’t think it’s going to live there for long, but it has to do with the fact that right now, there is a big skeleton closet that is over $1.5 billion of cumulative liquidations that can potentially happen in the DeFi [decentralized finance] ecosystem for Ethereum.”
Merten shares a chart illustrating the liquidation levels of DeFi protocols in Ethereum. According to the crypto strategist, these protocols will trigger a massive sell-off event if ETH plunges to a certain level.
“If we start to get around $750 to $550, you’re going to start getting a cascading effect of sell-side pressure in the Ethereum market… If you want to look at it in terms of ETH, we’re talking about a million plus ETH that is at risk of leading us down and causing that additional sell-side pressure to quickly get from $750 and $550 for ETH’s price down to $300.”
According to Merten, a nosedive to $300 for ETH is comparable to Ethereum’s massive correction during the 2018 crypto bear market.
“If we repeat history, just simply, not even considering the macro environment, that takes us down to $300.”
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