3 Altcoins face nearly $5 billion in liquidity this week.
In the last week of January, the feeling of “high fear” returned to the market. This feeling led to control of short positions. However, a number of data points suggest that many altcoins may cause large-scale liquidity driven by their own unique factors.
This week, altcoins such as Ethereum (ETH), Chainlink (LINK), and River (RIVER) could collectively generate nearly $5 billion in liquidity. This is the reason.
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1. Ethereum (ETH)
Ethereum's 7-day liquidity map shows a severe imbalance between short positions and potential cumulative liquidity between long positions.
Specifically, if ETH returns to $3,200 this week, short sellers could face losses of over $4.8 billion.
There are obvious reasons for traders to be cautious. Analyst CW, Ethereum Whale Vs. Using Retail Delta data, it indicates that whales regained control of ETH last week. The scale changed from negative to positive and continues to increase significantly.
“Retail investors are flowing out, while whales are increasing their long positions. Retail investors will suffer this fall. Whales will continue to panic until they give up,” said analyst CW.
A recent report from BeinCrypto showed that many whales increased their holdings when ETH dropped below $3,000. This behavior can trigger pullbacks and lead to heavy losses on short positions.
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2. Chainlink (LINK)
Like ETH, LINK is also experiencing an imbalance in its liquidity map. At the end of January, the negative sentiment in the altcoin market caused initial traders to allocate more capital and give short positions to LINK.
As a result, if LINK recovers, these traders will suffer huge losses. If LINK returns to $13 this week, the total liquidation of short positions could exceed $40 million.
Meanwhile, exchange data shows that LINK stock hit a new monthly low in January, CryptoQuant reported. The chart indicates that despite the price drop, investors will continue to accumulate LINK and withdraw from the exchange. This behavior reflects long-term confidence in the property.
Additionally, on-chain analytics platform Santiment data describes LINK as one of the most undervalued altcoins following the recent market crash.
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An unexpected rebound could occur if the pressure to stockpile intensifies as prices fall. Such a move would increase the risk of liquidation for LINK short sellers this week.
3. river
River Decentralized Finance (DeFi) protocol creates a chain-abstract stable coin system. It allows users to deploy collateral on one blockchain and access liquidity on another without using bridges or capped assets.
RIVER's market capitalization fluctuated with the broader market and reached a new high of over $1.6 billion. Just a month ago, its market value was less than $100 million.
This rapid increase has sent many traders into FOMO behavior. As a result, long positions are now dominant, potentially leaving the long side with significant liquid value.
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If River moves more than expected and falls below $60 this week, long positions could lose up to $35 million.
Is this situation possible? The information on the chain gives many warning signs. According to Eterscan data, the five river basins control more than 96.6% of the total supply, indicating high concentration.
Investor Hani said, “This Twitter is controlled by an insider. Keep using it. Be careful starting with MYX, COAI, AIA and almost zero.”
While some investors are confident that River will soon reach $100, others are beginning to express skepticism, fearing inflation. Such a reversal could pose a significant liquidity risk to RIVER's long positions.
These altcoins show various market changes in the altcoin space at the end of January. Analysts widely agree that the altcoin market is getting more selective. Only assets that attract institutional interest can sustain capital flows and long-term growth.
