3 Altcoins in January Volatility Increasing Liquidity Risk
Positive sentiment shows signs of returning to the market in the first week of January, pushing altcoins into a recovery. However, there are doubts about whether this recovery can last.
A number of altcoins are likely to trigger significant liquidity as their data formulas approach dangerous zones that have already caused liquidity. Which altcoins stand out?
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1. Ethereum (ETH)
Several bullish factors support long positions in Ethereum (ETH) this week. The number of new ETH holders has increased recently. The Ethereum login queue has exceeded the queue. On-chain Ethereum transactions hit a ten-year high.
As a result, traders have increased capital and profit on long positions. This pushed long liquidity above short liquidity.
However, one has come out regarding measurement. ETH's estimated leverage ratio has reached an all-time high.
This ratio is an exchange's open interest divided by its coin reserves. It reflects the average profit used by traders. The rising value indicates that many investors are taking significant risks in trading products.
Long-term traders may see short-term gains when stressful conditions occur. Still, raising it serves as a dire warning. A major liquidity event for ETH can happen at any time.
If ETH declines to the $2,800 zone this week, long-term liquidity could exceed $5.8 billion.
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2. Bitcoin Cash (BCH)
Veteran investor Peter Brandt mentioned Bitcoin Cash in his recent opinion piece. It indicated that BCH is approaching the key $650 resistance level. Occurrence there may set a higher price range.
A recent BeCrypto report also highlighted several reasons for further support for BCH.
Derivatives traders seem to share this bullish view. You are allocating more leveraged capital to long positions than to shorts.
However, Coinglass' data reveals another big concern. BCH open interest reached $980 million, a record high.
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Historically, when BCH open interest rose above $600 million, an extended price correction followed.
Additionally, BCH is trading near the strong $650 resistance level. This increases the possibility of leverage at any time.
If BCH drops to the $570 level this week, cumulative long liquidity could exceed $80 million.
3. Pepper (PEPE)
Early January marks the shift of capital flows into Mem coins. This has renewed hope for the new meme coin season.
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Recently, predictions that PEPE's market cap could reach $69 billion by 2026 boosted the positive sentiment around the token.
PEPE's liquidity map shows that if the price drops to $0.00000613, long liquidity could exceed $15 million. This represents a reduction of about 10% from current levels.
This scenario remains plausible. PEPE is up more than 70% since the beginning of the year. Early buyers are now sitting on profits and may choose to take profits as market uncertainty continues.
Moreover, analysts have warned of the possibility of an Elliott Wave correction. They suggest that PEPE may have already completed the third upward wave.
The crypto market may experience continued volatility in the coming days as geopolitical tensions rise. In the year If we don't learn from the mistakes that led to more than $150 billion in liquidations in 2025, the same losses could be repeated in 2026.
