3 Altcoins face significant liquidation risks in the third week of February

The cryptocurrency market has entered its third week of February with a notable recovery in many altcoins. However, negative market sentiment has yet to improve, creating potential liquidation risks for overly optimistic traders.

Altcoins such as XRP, DOGE, and TAO are becoming focal points this week due to significant developments. Nonetheless, investors should consider the associated risks.

XRP

Liquidation data shows that the total accumulated liquidation volume of Long positions on XRP currently exceeds that of Short positions.

This week, if XRP’s price drops to $1.30, total Long liquidations could surpass $200 million. Conversely, if the price rises above $1.63, total Short liquidations could reach $150 million.

XRP Liquidation Map | Source: CoinglassLast Sunday, XRP’s price rose to $1.66 before quickly falling below $1.50 on Monday. Analyst Dom noted that strong selling pressure emerged from the Upbit exchange, as indicated by the XRP Spot Cumulative Volume Delta.

XRP Cumulative Trading Volume Difference | Source: DomData indicates that within 15 hours, approximately 50 million XRP were sold on Upbit, creating significant selling pressure. This phenomenon occurred just before the Lunar New Year — an important holiday in many Asian countries, often raising concerns about decreased liquidity.

Furthermore, XRP accounts for a large share of trading volume on both Upbit and Bithumb in South Korea. Therefore, selling pressure from Asian investors could pose substantial risks to XRP Long positions this week.

Dogecoin (DOGE)

Recent optimistic discussions within the community have prompted traders to shift funds into DOGE Long positions this week.

If DOGE’s price drops to $0.091, total Long liquidations could reach nearly $90 million. Conversely, if the price rises to $0.114, total Short liquidations could amount to about $53 million.

DOGE Liquidation Map | Source: CoinglassHowever, DOGE traders setting Long orders should exercise caution. Data from Nansen shows that DOGE balances on exchanges (represented by the yellow line) have surged since February 12 — the point when DOGE began recovering due to rumors of the X Money launch.

DOGE Balances on Exchanges | Source: NansenMany DOGE investors seem to be taking advantage of this recovery to offload tokens by transferring them to exchanges. If this trend continues, DOGE’s price could adjust downward, approaching liquidation levels for Long positions this week.

Bittensor (TAO)

The listing of Bittensor (TAO) on South Korea’s Upbit exchange on February 16 is expected to provide new momentum, supporting a price recovery for this token.

According to liquidation data, if TAO rises above $283 this week, total Short liquidations could exceed $13 million. Conversely, if the price drops to $160, total Long liquidations could reach $11.5 million.

TAO Liquidation Map | Source: CoinglassAmid ongoing discussions about the link between artificial intelligence (AI) and cryptocurrencies, Bittensor (TAO) is currently stabilizing at a long-term support zone. Analyst Michaël van de Poppe predicts that TAO will soon experience a strong rebound.

Bittensor (TAO) Price Structure | Source: Michaël van de Poppe“I believe protocols integrating AI and cryptocurrencies are essential components of any investment portfolio. I’m glad I increased my holdings in this area. I expect to see even stronger growth soon, at least a correction back to around $300,” Michaël van de Poppe stated.

New liquidity from Upbit, combined with positive forecasts from Michaël van de Poppe, could put TAO’s Short positions at risk this week.

Investors should closely monitor market developments and carefully consider their trading decisions to minimize risks amid the current volatile market environment.