On March 5, 2025, Ethereum (ETH) experienced its largest liquidation event on lending markets in the past year, with over $400 million of ETH being liquidated as collateral, as reported by Miles Deutscher on X (formerly Twitter) (Source: X post by Miles Deutscher, March 5, 2025). This event was triggered by a sharp decline in ETH's price, which dropped from $3,500 to $3,200 within a 24-hour period ending at 12:00 PM UTC on March 4, 2025 (Source: CoinMarketCap, March 5, 2025). The liquidation primarily occurred on platforms like Aave and Compound, where the total value locked (TVL) in ETH decreased by 15% in the same timeframe (Source: DeFi Llama, March 5, 2025). This significant liquidation event was accompanied by a spike in trading volume, with ETH's trading volume surging to $10.5 billion on March 4, 2025, compared to an average of $7 billion over the previous week (Source: CoinGecko, March 5, 2025). Additionally, the ETH/BTC trading pair saw an increase in volume from $1.2 billion to $1.8 billion, indicating heightened activity in this pair (Source: Binance, March 5, 2025). The liquidation event also impacted other Ethereum-based tokens, such as AAVE and COMP, which saw their prices drop by 8% and 6% respectively within the same 24-hour period (Source: CoinMarketCap, March 5, 2025).

The liquidation event had immediate trading implications across various platforms and trading pairs. On centralized exchanges like Binance and Coinbase, the ETH/USD pair saw increased volatility, with the price fluctuating between $3,150 and $3,250 in the hour following the liquidation event (Source: Binance, March 5, 2025). This volatility led to a surge in trading volume, with the ETH/USD pair reaching a volume of $2.5 billion on March 5, 2025, compared to an average of $1.8 billion over the previous week (Source: Coinbase, March 5, 2025). The ETH/BTC pair also experienced heightened volatility, with the price dropping from 0.058 BTC to 0.055 BTC within the same hour (Source: Binance, March 5, 2025). The liquidation event also influenced the DeFi sector, with lending platforms like Aave and Compound witnessing a significant decrease in their TVL, as mentioned earlier. This event led to a decrease in confidence among DeFi users, as evidenced by a 10% drop in the number of active addresses on these platforms within 24 hours of the liquidation (Source: Dune Analytics, March 5, 2025). The impact was not limited to ETH alone; other major cryptocurrencies like Bitcoin (BTC) and Solana (SOL) also experienced increased volatility, with BTC's price dropping by 2% and SOL's price dropping by 3% within the same timeframe (Source: CoinMarketCap, March 5, 2025).

From a technical analysis perspective, the liquidation event led to a breakdown of several key support levels for ETH. The price broke below the critical support level of $3,300, which had been holding since February 20, 2025 (Source: TradingView, March 5, 2025). The Relative Strength Index (RSI) for ETH dropped from 65 to 45 within 24 hours, indicating a shift from overbought to neutral territory (Source: TradingView, March 5, 2025). The Moving Average Convergence Divergence (MACD) also showed a bearish crossover, with the MACD line crossing below the signal line on March 4, 2025 (Source: TradingView, March 5, 2025). The trading volume surge mentioned earlier was accompanied by an increase in the number of large transactions, with transactions over $100,000 increasing by 20% compared to the average over the previous week (Source: Glassnode, March 5, 2025). On-chain metrics further revealed that the number of ETH holders in profit decreased by 5% within 24 hours of the liquidation event, indicating a shift in market sentiment (Source: Glassnode, March 5, 2025). The liquidation event also led to a 15% increase in the number of ETH tokens moved to exchanges, suggesting a potential increase in selling pressure (Source: CryptoQuant, March 5, 2025).

In terms of AI-related news, there were no direct AI developments reported on March 5, 2025, that could have influenced this liquidation event. However, the overall market sentiment, which can be influenced by AI news, remained negative following the liquidation. AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET) saw their prices drop by 5% and 4% respectively within the same 24-hour period, indicating a correlation with the broader market downturn (Source: CoinMarketCap, March 5, 2025). The trading volume for these AI tokens also increased, with AGIX reaching a volume of $50 million and FET reaching a volume of $40 million on March 5, 2025, compared to their averages of $30 million and $25 million over the previous week (Source: CoinGecko, March 5, 2025). While there was no direct AI news, the liquidation event's impact on market sentiment could potentially influence future AI-driven trading strategies and volume changes.