The crypto market entered the third week of February with a notable recovery in several altcoins. However, the overall negative sentiment has not yet improved, creating a potential liquidation situation among overly optimistic traders.
This week, altcoins such as XRP, DOGE, and TAO are attracting attention due to big movements, but they also come with the following risks.
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1.XRP
The XRP liquidation map shows that the cumulative liquidation value of long positions is slightly higher than the cumulative liquidation value of short positions.
If XRP falls to $1.30 this week, cumulative long liquidations could exceed $200 million. Conversely, if XRP rises above $1.63, the cumulative liquidation of short sales could reach $150 million.
On Sunday, XRP briefly rose to $1.66, but quickly fell below $1.50 on Monday. Analyst Dom identified the selling pressure coming from the Upbit exchange through the XRP Spot Cumulative Volume Delta indicator.
According to the data, approximately 50 million XRP was sold net on Upbit within 15 hours, creating strong selling pressure. The pressure comes ahead of the Lunar New Year holiday, which often heightens concerns about declining liquidity in many Asian countries.
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Meanwhile, XRP accounts for a large share of trading volume on both Upbit and Bithumb in South Korea. As a result, long positions could be at risk this week due to selling pressure from Asian investors.
2. Dogecoin (DOGE)
Recent bullish discussion within the community is prompting traders to allocate capital to long DOGE positions this week.
If DOGE falls to $0.091, cumulative long liquidations could approach $90 million. On the other hand, if DOGE rises to $0.114, the cumulative short interest liquidation could be around $53 million.
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Why should DOGE long traders remain cautious? According to Nansen data, DOGE’s exchange balance (yellow line) has risen sharply since February 12, when DOGE started to recover due to rumors about the upcoming launch of X Money.
Many DOGE investors appear to be using the recovery as an opportunity to exit their positions by moving their tokens to exchanges. If this trend continues this week, DOGE could potentially adjust its long positions and head toward liquidation levels.
3. Bitensor (TAO)
The listing of TAO on South Korea’s Upbit exchange on February 16 could provide new impetus to support the price recovery.
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The liquidation map shows that if TAO rises above $283 this week, short liquidations could exceed $13 million. Conversely, if TAO falls to $160, long liquidations could reach $11.5 million.
Analyst Michael van de Poppe is predicting a strong recovery as the crypto community debate over AI continues to capture the attention of the broader market and Bittensor (TAO) corrects towards its long-term support zone.
“We believe that AI<> protocols working on crypto are a must for every portfolio and we are happy to add capital to this position. We think we will see further strength from here, at least back to the average ~$300,” said Michael van de Poppe.
New liquidity from Upbit and Michael van de Poppe’s valuation could put TAO short positions at risk.
