Ethereum’s Ratio Falls 26% – Trustnodes

The crypto now goes for 0.065 bitcoin per eth, its lowest level since October last year.

Ethereum has clearly fared worse than bitcoin during the recent dive, with it still more than 50% below its peak of $5,000, while bitcoin crossed above $37,000.

One reason for this added pressure may be liquidations in defi to such extent that a stablecoin, MIM, is losing its peg.

Just like normal liquidations when you long and price moves against you, collateralized deposits in defi can also automatically be sold off by the smart contract if it falls below the borrowed amount.

That can lead to a cascade as the automatic spot selling reduces price further, potentially putting other borrowers in the red, until it balances out.

Yet there are plenty of places where you can long and short bitcoin, so it isn’t clear whether ethereans are doing it more because of defi or otherwise.

In addition the NFT boom should add demand for eth, so its ratio should increase in normal circumstances.

But of course the past two weeks have not been too normal, with bitcoin usually doing better in a downtrend perhaps because it is more distributed than any other crypto.

That downtrend may be softening now as matrix glitches like MIM point things may have gone a bit too far, which may mean the eth ratio will also stabilize, but what the market has in store remains to be seen.