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According to the Cryptocurrency Fear and Greed Index, fear dominated the sentiment of the crypto market in the third week of December, as the index registered a point of extreme fear. This negative mood has led to short positions that have outperformed.
However, many altcoins have their own triggers that can lead to the liquidation of these short positions. What are these altcoins, and what specific risks do they face?
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1. Solana (SOL)
Solana’s 7-day liquidation chart shows that the volume of potential short liquidations is twice that of long positions.
He specifically stated that if Solana’s price rises to $147 this week, traders holding short positions could experience losses of up to $1 billion. Conversely, if Solana falls below $120, long traders could face liquidations of around $500 million.
Several factors suggest that traders should be cautious while holding short positions this week.
ETF registered for Solana ETF SOL During the last week Seven consecutive days of positive flows. It is worth noting that Bitwise’s Solana Fund has maintained… Positive flows for 33 consecutive days Since its launch. The fund currently holds more than $600 million of Solana’s assets. This trend indicates continued institutional demand.
Solana has also established strong support around the $130 level over the past four weeks. In addition, the positive news about Ripple expanding its DeFi use cases in the Solana network contributed to this Via Hicks Trust In improving market sentiment.
This creates strong reasons for Solana to recover this week, which may trigger the liquidation of short positions.
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2. Cardano (ADA)
The general negative market sentiment, as in Solana, encouraged short-term Cardano ADA derivatives traders to increase their capital allocation and leverage in short positions.
This behavior significantly increased the total volume of short position liquidations. If ADA rises to $0.45 this week, short positions could incur losses of up to $50 million. Conversely, if ADA drops to $0.35, long positions could face liquidations worth about $19.5 million.
ADA short traders should consider a key factor to reduce risk which is the positive sentiment surrounding the Midnight project.
It has been explained that the Midnight Network is a new blockchain developed by Inbot Output Global (IOG), the company behind Cardano, which was founded by Charles Hoskinson.
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Midnight Network focuses on privacy through zero-knowledge proof technology, specifically ZK-SNARKs. The price of the NIGHT token has increased by more than 150% During the last seven days. The project also received the “Annual Breakthrough” award from BeInCrypto.
The growing demand for NIGHT is driving the demand for ADA. According to the Taptool trading platform, NIGHT recorded the highest trading volume on the DEX Exceeded 85 million ADA During the last five days. Also, ADA holders can Win a NIGHT token Through its ADA storage.
3. The child
PIPPIN was a meme that gained a lot of attention towards the end of the year. Its market value jumped from less than $60 million to More than $350 million In just three weeks.
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The liquidation heat chart indicates that the total potential liquidation for long positions is always higher than for shorts. This data shows that many short-term traders still expect prices to continue to rise.
It should be noted that this forecast carries significant risks. A recent analysis by blockchain data tracking account Evening Trader Group revealed that 93 wallets currently hold 73% of the total supply.
Divide these portfolios into three main groups, with each group exhibiting distinct assets and behaviors. The Evening Trader Group said this grouping may be the main driver behind the price increase, but selling pressure can emerge at any time.
Also, the account associated with the project (thepippinco) has not published. Every update Since June, this silence has raised concerns about the team’s commitment to the project.
If Pippin falls below $0.30 this week, more than $9 million of long positions could be liquidated, and this number could be higher if Pippin experiences a severe crash, similar to The fate of other manipulated memes.
