Top 3 Altcoins at High Risk of Liquidation This Week
In the rapidly evolving world of cryptocurrencies, recent developments have highlighted significant risks of mass liquidations for XRP, DOGE, and ADA. These altcoins, popular among traders due to their high leverage and recent price volatility, are currently under the spotlight.
XRP, with an open interest (OI) of approximately $10.9 billion, has been a leading contender in altcoin liquidations. Aggressive long derivative positions and a high bullish funding rate, coupled with spot market depth of just $10 million, suggest that a sudden price correction could trigger liquidations exceeding $1 billion. In fact, XRP led altcoin liquidations with about $112.87 million wiped out in 24 hours, mostly from long positions.
DOGE, which surged to around $0.28, is another altcoin at risk. Highly leveraged short-term traders have driven its price, and a sharp drop to approximately $0.236 could result in around $300 million in long liquidations. The high funding rate, as demonstrated by a single $1.15 million DOGE liquidation, underscores the fragility of its leveraged positions.
Cardano (ADA) shows an OI near $1.74 billion, with mixed on-chain signals indicating some bearish risk from leverage despite underlying bullish fundamentals. A decline to $0.78 could cause about $120 million in long liquidations, while a jump to $1 might lead to $58 million in short liquidations. Regulatory uncertainties add to ADA’s volatility risk.
The overall crypto market environment is fragile, with total liquidations recently hitting nearly $1 billion in 24 hours, mostly from long positions, amplified by regulatory pressures such as the SEC’s ETF hesitations.
The 7-day liquidation map shows that if DOGE drops to $0.236, cumulative long liquidations could reach $300 million. Meanwhile, if ADA drops to $0.78, cumulative long liquidations could exceed $120 million.
These figures underscore high liquidation risks due to large leveraged positions in all three popular altcoins if price declines persist or accelerate. XRP poses the greatest systemic risk due to its massive OI and leverage, followed by DOGE with heavily leveraged hype-driven traders, and ADA facing regulatory uncertainty alongside leverage-driven downside risk.
[1] Data source: CoinGlass, Glassnode, and CoinMarketCap. [3] Additional context: SEC's ongoing deliberations regarding Bitcoin ETF proposals.
In the context of ongoing discussions about Bitcoin ETF proposals and the SEC's deliberations, concerns about massive liquidations persist for three popular altcoins: XRP, DOGE, and ADA. Specifically, XRP's $10.9 billion open interest and high leverage pose the greatest systemic risk, while DOGE's highly leveraged hype-driven traders and ADA's regulatory uncertainty and leverage-driven downside risk make them vulnerable to significant long liquidations if prices decline. Investors ought to exercise caution when considering financing and investing in these technologies amid these heightened risks.
