Ether’s (ETH) 11.5% slide over the past 24 hours has moved the second-largest cryptocurrency closer to a series of mammoth $340 million liquidations on collateralized debt platform MakerDAO.

On-chain data shows three MakerDAO positions will be liquidated when the ETH price hits $1,926, $1,842 and $1,793. Each position is worth between $109 million and $126 million.

Ether, the token of the Ethereum blockchain, is trading around $2,390 following a market-wide sell-off sparked by waning sentiment and a drop in global equities.

Whether the plunge is the trigger for a bear market remains to be seen. Assets have typically slumped as much as 30% in previous bull markets to shake out over-leverage before moving back to the upside, ETH is down by 42% since Dec. 16.

In order to trigger the MakerDAO liquidations, ETH needs to fall by another 19%, at which point it could spark a liquidation cascade across decentralized finance (DeFi) protocols and exchanges.

Over the past 24 hours $296 million worth of ETH positions have already been liquidated on exchanges, according to CoinGlass.

It’s worth noting that deleveraging events spurred by sell-offs can present an opportunity for savvy traders to purchase undervalued assets, as the spot price is determined by a short-term lack of liquidity and not what might be considered the true value.

Crypto traders are feeling the jitters today.

The widely-watched Crypto Fear and Greed Index, a market indicator that uses social media posts, volatility, trends and prices to gauge trader sentiment, dropped to a five-month low of 25 in its latest update.

That’s a big fall from yesterday’s figure of 49, landing it in the “extreme fear” zone, coming as overall market capitalization fell 10% in the past 24 hours as bitcoin and major tokens such as Solana (SOL) and xrp (XRP) fell more than 14%.

The Fear and Greed Index measures how people feel about crypto on a scale from 0 to 100. A low number, like 25, means fear is taking over, while a high number shows excitement or greed. Tuesday’s drop from 49 to 25 is one of the sharpest since September and indicative of a quick shift toward overly bearish sentiment.

Reasons for the panic range from money flowing out of bitcoin ETFs, with over $1 billion pulled out in the last two weeks, to the general lack of catalysts to sustain a run that started with crypto-friendly Republican Donald Trump’s win in the November elections.

Elsewhere, Nasdaq futures pointed to continued losses in technology stocks ahead on Tuesday, and strength in the Japanese yen is sparking fears of an August-like risk aversion.

There’s hope for bulls, however. Extreme fear can be a sign that investors are too worried, turning into a buying opportunity in the short term as assets are considered oversold. Some traders also say poor U.S. economic data could mean central banks are forced to take steps to recharge the economy — a move that may eventually fuel a rally.

U.S. spot-listed bitcoin (BTC) exchange-traded funds (ETFs) experienced the second-biggest outflows of the year on Monday, dropping $516.4 million, Farside data shows.

The withdrawals, the ninth net outflow in 10 days, reflect a growing discomfort with the largest cryptocurrency, which has traded in a narrow price range between $94,000 and $100,000 for most of this month.

On Tuesday, bitcoin broke out of its three-month channel, falling below $90,000 and sliding to as low as $88,250.

According to Velo data, the bitcoin CME annualized basis — the difference between the spot price and futures — has dropped to 4%. This is the lowest since the ETFs started trading in January 2024. This is also known as the cash-and-carry trade, which is a market-neutral strategy that seeks to profit from the mispricing between the two markets.

The strategy involves taking a long position in the spot market and a short position in the futures market. Velo data shows a one-month futures forward contract. Investors collect a premium between the spread of the spot and futures pricing until the futures contract expiry date closes.

At the current level, the basis trade is less than the so-called risk-free rate, the yield on the U.S. 10-year Treasury of 5%. The difference may persuade investors to close their positions in favor of the greater return. That could see further outflows from the ETFs. Because this is a neutral strategy, investors will also have to close their short position in the futures market.

Arthur Hayes, the co-founder of Bitmex, alludes to the basis trade unravelling in a post on X.

«Lots of IBIT holders are hedge funds that went long ETF short CME future to earn a yield greater than where they fund, short term US treasuries,» he wrote. «If that basis drops as bitcoin falls, then these funds will sell IBIT and buy back CME futures. These funds are in profit, and given basis is close to UST yields they will unwind during US hours and realise their profit. $70,000 I see you mofo!»