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Buying pressure has returned to the market after three consecutive weeks of sharp declines. However, this pressure remains completely insufficient to remove investors’ doubts. Several altcoins are now showing unique catalysts that could drive significant recoveries this week, increasing the risk of liquidation.
Ethereum (eth), Dogecoin (doge), and Zcash (zec) combined, could cause more than $3.1 billion in liquidations if traders fail to properly assess the following risks.
1. Ethereum (ETH)
The 7-day Ethereum (eth) liquidation chart shows that the potential liquidation from short positions exceeds that from long positions.
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It seems that many traders are anticipating further declines. Ethereum (eth) has already recorded a decline of about 40% since mid-January.
This bearish forecast faces increasing risks. Blockchain data has shown that Only about 16 million Ethereum (eth) remain in exchanges. This represents the lowest level since 2024.
The recent settlements marked an acceleration in the outflow of funds from the exchanges. Declining exchange balances reduce available supply. This dynamic could strengthen the price recovery due to supply and demand imbalances.
In addition, Post more than 4 million Ethereum (eth) Even in the staking queue. This restricts the supply of liquid in the market.
If the recovery of Ethereum (eth) is strengthened by these factors, short sellers could face significant risks. If Ethereum rises to $2,370 this week, potential liquidations of short positions could reach $3 billion.
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2. Dogecoin (DOGE)
Dogecoin (DOGE) recorded a drop below $0.10. This level corresponds to its lowest price in 2024. The 7-day liquidation chart shows the possibility of short positions worth $98 million being liquidated if Dogecoin recovers to $0.109 this week.
Analysts argue that such a scenario remains possible considering short-term and long-term structures together.
The short-term Tardigrade Trader indicates the presence of a bullish flag pattern. This formation suggests that Dogecoin could go towards $0.12 this week.
From a long-term perspective, analyst Javon Marks highlighted the formation of higher lows (HL) after higher highs (HH). This structure indicates strength.
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Javon Marks predicted that if the higher lows continue, we could see Dogecoin rise more than 640% and above the current record levels of around $0.73905.
The Dogecoin debate could pick up momentum again. In early February, billionaire Elon Musk answered a question from the Tesla Owners Silicon Valley account about Dogecoin.
3. Zcash (ZEC)
Zcash (ZEC) has fallen by about 50% since January 8th. This decline was followed by the announcement of the departure of the Electric Coin Company (ECC) team, the primary developer of Zcash. The general pessimism of the market caused the decline to continue longer.
The ZEC liquidation chart showed that short position liquidations dominate the picture. This indicates that many traders are still waiting for the downtrend to continue.
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Many positive signs have appeared recently. Ethereum founder Vitalik Buterin announced his public donation to Shielded Labs, a development group working on Zcash.
Vitalik Buterin stressed that privacy is not optional, describing it as a core blockchain infrastructure. This move may help revive positive sentiment towards ZEC.
Data from zkp.baby indicates that more than 5 million zdkash are still reserved Protected swimming pooldespite the sharp drop in price. It seems that the negative news and widespread selling pressure did not weaken the confidence of investors in the ZDcash technology.
The altcoin market has started to recover in general after a period of panic selling. Recent analyzes indicate that the total value of the market It can recover and exceed $2.8 trillion .
This broader recovery, coupled with asset-specific catalysts, is pushing prices beyond the expectations of short sellers, increasing the possibility of liquidations.
