ETH Collateral Stress: DeFi Lending at Risk When Prices Fall
The post ETH Collateral Stress: DeFi Lending at Risk When Prices Fall appeared on BitcoinEthereumNews.com. When Ether sells off fast, overcollateralised loans that looked safe yesterday can be on liquidation watch today. Because ETH backs a large share of DeFi borrowing, price shocks can ripple through lending pools, oracles, and liquidation queues in minutes. Late May 2026 offered a live stress test: nearly $959 million in leveraged crypto positions were liquidated in 24 hours, with about $897 million of them longs, as ETH briefly fell below $2,000 and futures open interest hit a record 16.39 million ETH (≈$32.6 billion notional) CoinDesk. A week earlier, markets absorbed another ~$563 million in forced liquidations in a day, roughly $244 million of which were Ether longs CoinDesk. Against that backdrop, liquidity, governance decisions, and even legal actions can matter. In early May, Aave warned a proposed U.S. court seizure of ~30,765 ETH tied to exploit recoveries risked cascading