3 altcoins face major liquidation risks in the second week of December

Entering December, the altcoin market has broken free from last month’s deep downward trend, shifting into a sideways phase with new volatility. Several altcoins have stood out due to unique catalysts and a stream of positive news, prompting derivatives traders to boldly make one-sided bets. However, this week also brings several significant macro events that could expose these positions to substantial liquidation risks.

Zcash (ZEC): Recovery Expectations, High Liquidation Risk

After reaching a historic high $748 last month, ZEC’s price dropped by as much as 50%. This steep decline often attracts investors with a “fear of missing out” mentality, which in turn spurs derivatives trades betting on a recovery in December. As a result, cumulative long-side liquidation volumes have surged.

ZEC Liquidation Map | Source: CoinglassConfidence in long positions was further reinforced by news that Zooko Wilcox—the founder of Zcash—will participate in a discussion hosted by the SEC on December 15 about cryptocurrencies, financial oversight, and privacy. Investors expect his appearance to boost support for privacy-focused altcoins, including ZEC.

However, if long positions continue to maintain excessive optimism without stop-loss strategies, traders could face liquidation risks of up to $98 million if ZEC drops to $295 this week.

Analysis from Coinphoton shows that ZEC remains in a long-term downtrend after the previous FOMO surge, with technical structure displaying characteristics of a bubble pattern.

Aster (ASTER): New Momentum from Buyback Program

Aster—one of the leading perpetual DEXs on BNB Chain—once benefited greatly from the trading frenzy during the Perpetual DEX boom in September. However, ASTER’s price has since fallen more than 60% and is now trading below $1.

The liquidation map shows that the total open short positions far exceed long positions, but shorts also face significant risk this week.

ASTER Liquidation Map | Source: CoinglassRecently, Aster announced an accelerated buyback program starting December 8, 2025. The daily buyback volume has been raised to $4 million, up from $3 million previously.

This move could create momentum for ASTER’s price to recover this week. If ASTER rises to $1.07, the total short-side liquidation volume could exceed $32 million.

Technically, experts note that ASTER has reached a strong support zone and just broke a month-long downtrend line.

Bittensor (TAO): Halving Ahead, Liquidation Risk Skewed to Longs

The liquidation map for Bittensor (TAO) shows a clear imbalance, with long-side liquidation volume far surpassing shorts.

If the TAO price drops to $243.50, long positions could see liquidations close to $17 million. Conversely, if TAO climbs to $340, shorts could lose around $5 million.

TAO Liquidation Map | Source: CoinglassMany traders are betting on long positions, expecting price appreciation ahead of TAO’s first halving event. According to Coinphoton, on December 14, Bittensor is expected to reduce daily issuance from 7,200 TAO to 3,600 as the total supply reaches 10.5 million TAO.

Grayscale comments: “Reducing supply will increase TAO’s scarcity. Bitcoin’s history shows that lower supply can enhance network value, even with smaller rewards, as security and market value grow with each halving. Similarly, Bittensor’s first halving is a key milestone for the network’s maturation toward the 21 million token cap.”

Grayscale’s report has reinforced bullish sentiment among traders establishing long positions. However, without proper risk management strategies, a “sell the news” effect could trigger a wave of liquidations in the market.

Macro Volatility: Underlying Risk for Both Longs and Shorts

Beyond each altcoin’s internal factors, the second week of December also marks the Fed’s interest rate decision—a typically more impactful event than most crypto sector news. Even if traders correctly predict the Fed’s move, it’s hard to avoid extreme volatility, which can result in mass liquidations on both long and short positions.

In summary, the December altcoin market is transitioning, presenting intertwined opportunities and risks. Investors need to pay special attention to risk management and closely monitor macro developments to protect their positions against unpredictable volatility.

Ong Giao