🔥 Key Takeaways
- Total market-wide liquidations reached nearly $900 million at the start of the third week of January.
- Negative volatility driven by Trump’s tariff impact on the EU caused the spike in liquidations.
- XRP, Axie Infinity (AXS), and Dusk (DUSK) are showing warning signs and could trigger further major liquidations.
3 Altcoins That Could Trigger Major Liquidations in the Third Week of January
At the start of the third week of January, the cryptocurrency market experienced a significant surge in liquidations, with total market-wide liquidations reaching nearly $900 million. The primary driver of this negative volatility has been the impact of former President Donald Trump’s tariffs on the European Union (EU), which has created a ripple effect across various financial markets, including cryptocurrencies.
As the week progresses, several altcoins are showing warning signs that could lead to further substantial liquidations. Among these, XRP, Axie Infinity (AXS), and Dusk (DUSK) stand out as particularly vulnerable. Let’s delve into why these altcoins are attracting attention and what investors should be cautious about.
XRP: Ripple’s Regulatory Troubles Continue
XRP, the native cryptocurrency of the Ripple network, has been under intense scrutiny due to the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The SEC alleges that Ripple illegally sold unregistered securities, which has led to significant price volatility and increased liquidations. As the legal proceedings continue, the uncertainty surrounding XRP’s regulatory status could trigger further liquidations, especially if the market perceives a negative outcome.
Axie Infinity (AXS): The Play-to-Earn Downturn
Axie Infinity, a popular play-to-earn (P2E) game, has seen a significant surge in popularity and value over the past year. However, recent market trends have shown a downturn in the P2E sector, with player engagement and token prices declining. AXS, the governance token of Axie Infinity, is particularly susceptible to these market dynamics. The reduced player activity and lower token prices could lead to increased liquidations as investors and players seek to cut their losses.
Dusk (DUSK): Privacy and Regulatory Concerns
Dusk, a privacy-focused blockchain, has been gaining attention for its unique approach to secure and confidential transactions. However, the increased focus on privacy and the potential for regulatory scrutiny could be a double-edged sword. While privacy tokens are often sought after in times of market uncertainty, the risk of regulatory action could lead to increased selling pressure and liquidations. DUSK’s valuation and market sentiment will be closely monitored as the week progresses.
Investors should remain vigilant and monitor these altcoins closely. The combination of regulatory uncertainty, market volatility, and sector-specific trends could lead to significant price movements and liquidations. It is advisable to maintain a diversified portfolio and avoid overexposure to any single asset, especially in times of heightened market risk.
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