3 Altcoins Facing Major Liquidation Risks in the First Week of January
🔥 Key Takeaways
- The first week of January shows signs of positive sentiment returning to the market, pushing altcoins toward recovery.
- Despite the rebound, several altcoins face major liquidation risks due to their derivatives data approaching danger zones.
- Ethereum (ETH) is one of the altcoins standing out with significant liquidation risks.
Altcoins on Thin Ice
The cryptocurrency market is experiencing a slight resurgence in the first week of January, with many altcoins showing signs of recovery. However, this rebound may be short-lived, as several altcoins face significant liquidation risks. In this article, we will explore three altcoins that could trigger large liquidations due to their derivatives data approaching danger zones.
Ethereum (ETH) Leads the List
Ethereum (ETH) is one of the altcoins that stands out with significant liquidation risks. As the second-largest cryptocurrency by market capitalization, ETH has a large derivatives market. Its derivatives data is approaching danger zones that have caused liquidations in the past.
The liquidation risk for ETH is particularly high due to its high open interest and funding rates. Open interest refers to the total value of outstanding futures contracts, while funding rates represent the cost of holding a long or short position. When open interest and funding rates are high, it can indicate over-leveraging, which increases the risk of liquidation.
Other Altcoins at Risk
While Ethereum (ETH) is one of the most notable altcoins facing liquidation risks, it is not the only one. Two other altcoins that could trigger large liquidations are:
1. Solana (SOL): Solana’s derivatives data is also approaching danger zones, with high open interest and funding rates indicating over-leveraging.
2. Cardano (ADA): Cardano’s liquidation risk is high due to its large open interest and increasing funding rates, making it vulnerable to a potential liquidation event.
Conclusion
The first week of January may have brought some positive sentiment back to the market, but several altcoins face significant liquidation risks. Ethereum (ETH), Solana (SOL), and Cardano (ADA) are three altcoins that stand out with high liquidation risks due to their derivatives data approaching danger zones. Traders and investors should exercise caution and monitor these altcoins closely to avoid potential losses.
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