After three consecutive weeks of sharp declines, buying pressure has returned to the market. However, it is still not enough to completely dispel investor skepticism. Several altcoins are currently exhibiting unique catalysts that could drive significant recoveries this week, increasing liquidation risk.
Ethereum (ETH), Dogecoin (DOGE), and Zcash (ZEC) could collectively result in liquidations of more than $3.1 billion if traders fail to properly assess the risks below.
1. Ethereum (ETH)
ETH’s 7-day liquidation map shows that potential liquidations from short positions outweigh liquidations from long positions.
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Many traders seem to be expecting further declines. ETH has already fallen about 40% since mid-January.
These bearish expectations face increasing risks. According to on-chain data, only about 16 million ETH remain on the exchange. This level is the lowest since 2024.
The recent drop in stock prices has accelerated the outflow of funds from exchanges. As exchange balances fall, available supply decreases. This dynamic can amplify price recovery through demand and supply imbalances.
In addition, over 4 million ETH also remains in the staking queue. This further limits the market’s liquid supply.
If these factors strengthen ETH’s recovery, short sellers could face significant risks. If ETH rises to $2,370 this week, the potential liquidation value from short positions could reach $3 billion.
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2. Dogecoin (DOGE)
Dogecoin (DOGE) fell below $0.10. This level is comparable to the 2024 low. The 7-day liquidation map shows short-term liquidation potential of up to $98 million if DOGE recovers to $0.109 this week.
Analysts argue that such a scenario remains plausible, considering both short-term and long-term structures.
In the short term, trader Kumamushi points to a bull flag pattern. This setup suggests that DOGE could move towards $0.12 this week.
From a long-term perspective, analyst Javon Marks emphasizes the formation of Higher Lords (HL) following Higher Highs (HH). This structure represents strength.
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“If the higher lows hold, Dogecoin could rise over 640% from its current ATH level to ~$0.73905,” predicted Javon Marks.
The debate surrounding Dogecoin may also regain momentum. In early February, billionaire Elon Musk answered questions from the Tesla Owners Silicon Valley account about Dogecoin.
3. Zcash (ZEC)
Zcash (ZEC) has fallen about 50% since January 8th. The decline followed the announcement that the entire Electric Coin Company (ECC) team, Zcash’s core developers, would be retiring. Broad negative market sentiment is further prolonging the economic downturn.
ZEC’s liquidation map shows that potential liquidations from short positions are predominant. This shows that many traders still expect the downtrend to continue.
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There have been some positive signs recently. Ethereum founder Vitalik Buterin has publicly donated to Shielded Labs, the development group working on Zcash.
Buterin emphasized that privacy is not optional. He described it as the core blockchain infrastructure. This measure could help restore positive sentiment towards ZEC.
According to data from zkp.baby, despite the sharp drop in prices, over 5 million ZECs are still trapped in the shielded pool. Negative news and widespread selling pressure don’t seem to have eroded investor confidence in Zcash’s technology.
Overall, the altcoin market is starting to recover after a period of panic selling. According to recent analysis, the market capitalization could exceed $2.8 trillion.
This broad recovery, combined with asset-specific catalysts, could push prices up far beyond short sellers’ expectations and increase the likelihood of liquidation.
