The market has passed the middle of November, and the market capitalization of altcoins has fallen below $1 trillion. The ability of altcoins to recover while hitting rock bottom could cause volatility and large-scale liquidations for some assets.
Which altcoins face this risk? And what special factors should we pay close attention to? Details follow below.
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1. Ethereum (ETH)
Ethereum’s liquidation map shows a clear imbalance between potential liquidation volumes on the long side and short side.
Traders are allocating more capital and leverage to short positions. As a result, if ETH rebounds this week, it will incur even bigger losses.
If ETH rises above $3,500, over $3 billion worth of short positions could be liquidated. In contrast, if ETH were to fall below $2,700, the total long liquidations would only be around $1.2 billion.
Short sellers have reasons to hold positions. The ETH ETF recorded $728.3 million in outflows last week. Additionally, crypto billionaire Arthur Hayes recently sold his ETH.
However, technically, ETH remains in a major support zone around $3,100. This level can cause a powerful recovery.
ETH sentiment indicators are also in extreme fear. Historically, ETH has often recovered quickly from similar situations.
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Therefore, ETH’s recovery has a solid foundation and could cause significant losses for short traders.
2. Solana (SOL)
Similar to ETH, Solana’s liquidation map is also dominated by short liquidation volume, indicating a strong imbalance.
With SOL falling below $150 in November, many short-term traders are expecting a further decline towards $100. Not only retail traders but also whales have been short selling this month.
However, SOL ETF data paints a more positive picture. According to SoSoValue, the U.S. SOL ETF recorded net inflows of over $12 million on November 14, and over $46 million over the past week. Meanwhile, both the BTC ETF and ETH ETF had negative net flows.
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This provides a reason for SOL to rebound as investors continue to see strong demand for ETFs. The liquidation map shows that short liquidations could reach nearly $800 million if SOL rises to $156.
Conversely, if SOL falls to $120 this week, long liquidations could reach approximately $350 million.
3. Zcash (ZEC)
In contrast to ETH and SOL, ZEC’s liquidation map shows that long traders face the majority of potential liquidation risk.
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Short-term traders seem confident that ZEC will continue to form further highs in November. There’s a reason they have this view. ZEC locked in the Zcash Shield pool has increased sharply this month, with several experts still predicting that ZEC could potentially reach $10,000.
However, ZEC has faced repeated rejections around $700. Therefore, many analysts are concerned about a correction this week.
If a correction occurs and ZEC drops below $600, long liquidations could exceed $123 million.
Additionally, ZEC’s total open interest reached an all-time high of $1.38 billion in November, according to Coinglass data. This reflects a high level of leverage exposure, increasing the risk of volatile movements and large-scale liquidations.
Therefore, holding a long position in ZEC can be profitable in the short term. But without a clear take-profit or stop-loss plan, these positions can quickly face liquidation pressure.
