The first week of the new year saw a vicious pullback across all cryptocurrencies in the market. Ether (ETH) price dropped from its November peak at $4,800 peak to under $3,000 on Jan. 8 and Terra’s LUNA governance token also dropped from $85 on Dec. 31 to $67 on Jan. 8, 2022.
These unexpected dramatic moves often cause liquidation cascades in the lending market, but they also create unique buying opportunities in the collateral liquidation markets.
Liquidation stats from Kujira. Source: Twitter (NYSE:)Kujira Orca home page demo. Source: Kujira LitepaperExample of 100,000 UST liquidation in 1% and 2% pools.
Identifying the best time to buy
Figure1: Number of liquidated borrowers vs. ETH price. Source: Kujira Orca, Flipside CryptoFigure 2: Liquidated amount in USD vs. LUNA price.Source: Kujira Orca, Flipside CryptoFigure 3: bLUNA liquidated amount in USD vs. purchase discount.Source: Kujira OrcaFigure 4: bETH liquidated amount in USD vs. purchase discount.Source: Kujira OrcaDiscount bucket comparison for the past 3 months — January data is only until Jan.10. Source: Kujira Orca
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