Ethereum faced heavy selling pressure in early Monday trading, plunging below the $2.1K mark, a 25% drop from its opening price that day. This sharp decline was driven by major whale liquidations, with two dormant wallets transferring $149M and $201M worth of ETH to Bitfinex. These wallets were last active in 2019, when they withdrew 77,736 ETH—a move that raised speculation about the sudden liquidation.
The liquidation wave extended beyond Ethereum, hitting Aave (AAVE) with $200M in forced sales. Most of these sell-offs came from loans backed by Wrapped ETH (WETH), highlighting Ethereum’s dominance in the DeFi space. As a result, the total value locked (TVL) in Ethereum’s DeFi sector plummeted from $63B to $54B.
Market Reaction and Whale Activity
Despite the sharp drop, Ethereum quickly rebounded, closing above its opening price on Monday. Market watchers compare this correction to the August 2024 dip, when ETH fell to $2,112 due to Japanese yen carry trade restrictions. However, within 17 weeks, ETH recovered and crossed the $4K mark, proving that such corrections are not the end, but rather part of a larger bullish trend.
Institutional investors and whales seized the opportunity during the sell-off, signaling long-term confidence in Ethereum. Key players, including Seven Siblings (5,382 ETH) and 1inch Investments (7,289 ETH), accumulated ETH near day lows. Overall, whales purchased 50,429 ETH, reinforcing optimism for a recovery.
Solana’s Explosive Stablecoin Growth
While Ethereum navigates a volatile phase, Solana is experiencing a surge in stablecoin activity, doubling its market cap from $5.1B to $11.4B in January alone. This growth is largely attributed to the meme coin frenzy on the Solana network.
A notable factor fueling Solana’s rise is Donald Trump’s meme coin launch, which has accelerated stablecoin transactions on the network by 73%. The most dominant stablecoin on Solana is Circle’s USDC, which now holds $9.25B in value, accounting for over 80% of all stablecoin transactions on the blockchain.
In contrast, Ethereum and Tron remain heavily dominated by Tether’s USDT, with $65B and $60B in circulation, respectively. Despite this, USDC was the fastest-growing stablecoin in 2024, surging 78% to reach $53B.
With Circle expanding to new blockchains like Aptos, the gap between USDC and USDT could narrow significantly in the coming years. Given the rising adoption of stablecoins and meme coins, Solana and other altcoins are poised for strong future growth, making this an exciting time for the crypto market.
