A recent incident in the world of cryptocurrency has caught the attention of many investors and enthusiasts. A crypto whale holding a massive $26.47 million position in Wrapped Bitcoin (WBTC) narrowly escaped liquidation last Friday, as reported by on-chain data tracker Lookonchain.
The whale, identified by an Ethereum (ETH) address starting with Oxceef, was on the brink of being liquidated on the decentralized finance (DeFi) platform Compound after the price of Bitcoin plummeted to as low as $52,550 on September 6th. WBTC is an ERC-20 token pegged 1:1 to Bitcoin, allowing users to utilize the token as collateral for various financial transactions within the Ethereum ecosystem.
According to Lookonchain, the whale was facing potential liquidation of 488.45 WBTC, equivalent to $26.47 million, with a health rate as low as 1.07 and a liquidation price set at $50,429. This particular whale had already experienced three liquidations during the 2022 price crash, resulting in a total of 74,426 cWBTC, valued at $32.82 million, being liquidated.
In addition to this whale’s close call, Lookonchain also observed other addresses selling off Bitcoin as the price dropped. One such address, starting with 3ExiBLw, sold 100 BTC equivalent to $5.35 million, generating a profit of $206,000 when the price of Bitcoin neared the entity’s break-even point.
On the flip side, data from analytics firm IntoTheBlock revealed that 836,000 addresses purchased approximately 402,800 BTC, totaling $21 billion, between the price range of $51,113 and $54,303. However, Lookonchain cautioned that these addresses might decide to offload their holdings at breakeven prices.
Furthermore, Lookonchain also highlighted the deposit of 1,458 BTC, valued at over $78 million, by crypto firm Galaxy Digital into Coinbase Prime. Since Coinbase Prime offers trading and custody services, Galaxy Digital could have transferred the BTC stack for safekeeping or potential sale on the open market.
As of the time of writing, Bitcoin is trading at $54,987, showcasing the volatility and unpredictability of the cryptocurrency market. This incident serves as a reminder of the risks and challenges faced by investors in the crypto space.
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(Source: Lookonchain/X)
Image Source: Lookonchain/X
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