Key takeaways
What caused Ethereum’s sharp drop?
Ethereum plunged after a $330 million short position, and Trump’s new China tariffs triggered a $13 billion crypto market liquidation.
How did Ethereum hold up after the crash?
Despite the chaos, Ethereum still led the DeFi sector with $92.7 billion in total value locked (TVL).
Ethereum [ETH] tumbled sharply during a $13 billion crypto market wipeout – a liquidation wave larger than the FTX collapse.
The drop came after a $330 million short position hit just minutes before U.S. President Donald Trump announced new tariffs on China.
Chaos in the market
The crypto market went into free fall, with over $13 billion wiped out in 24 hours; far exceeding the $1.6 billion liquidated during the FTX collapse.
ETH plunged as much as 16% in the last day, dropping below $3,800 before finding mild support around $3,837 at press time.
Source: TradingView
The crash came just after a mysterious $330 million ETH short hit, moments before Trump’s China tariff announcement.
As panic spread, gas fees spiked over $500, decentralized exchanges froze, and major altcoins nosedived more than 30%.
Whales and hackers make moves
Source: X
Just minutes before Trump’s China tariff news broke, one trader opened a massive $330 million short on Ethereum, and it couldn’t have been better timed.
One even wonders if it was a planned exit, which brings about talk about insider trading.
Source: X
The position set off a domino effect across the market, triggering panic. Even wallets linked to known hackers joined the exit, reportedly dumping 5,480 ETH worth about $20 million at a loss of $3.7 million.
Ethereum still dominates DeFi
Despite all the chaos from the last day, Ethereum’s grip on decentralized finance remains unshaken.
Data from Artemis showed Ethereum leading with a massive $92.7 billion in total value locked (TVL); more than double the combined TVL of Aave and Lido, the next biggest players.
Source: Artemis
Despite market turmoil and a surge in short selling, Ethereum’s ecosystem remained resilient, maintaining the largest share of DeFi liquidity.
