These 3 altcoin prices could drop significantly this week.
According to the Crypto Fair and Greed Index, the crypto market sentiment in the 3rd week of December was driven by high levels of fear. This negative sentiment has caused short positions to dominate.
However, many altcoins have their own incentives that can trigger the liquidation of these short positions. Which are altcoins, and what specific risks do they face?
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1. Solana (Sun)
A 7-day liquefaction temperature map of the SOL shows that the potential liquefaction of short positions is twice that of long positions.
In particular, if SOL rises to $147 this week, traders holding short positions may lose up to $1 billion. Conversely, if SOL falls below $120, long traders could face a liquidation of around $500 million.
Several factors suggest that traders should exercise caution when taking short positions this week.
First, SOL ETFs recorded seven consecutive days of positive returns last week. Notably, the Bitwise SOL ETF has maintained positive returns for 33 consecutive days since its launch. Currently, it has SOL worth more than 600 million dollars. This approach reflects a continuing institutional need.
Second, SOL has formed strong support around the $130 level over the past four weeks. Additionally, positive news regarding XRP expanding DeFi use cases through Solana's Hex Trust boosted market sentiment.
As a result, SOL has strong reasons to recover this week, which may lead to a short liquidation.
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2. Cardano (ADA)
Similar to SOL, overall negative market sentiment encouraged short-term ADA derivative traders to increase capital allocation and increase short positions.
This feature has significantly increased the total amount of short liquid. If ADA rises to $0.45 this week, short positions could lose up to $50 million. Conversely, if the ADA falls to $0.35, long positions could experience a liquidation of about $19.5 million.
One key factor that ADA short traders should consider to reduce risk is the positive sentiment surrounding the midnight project.
The Midnight Network is a new blockchain developed by Input Output Global (IOG), the company behind Cardano, founded by Charles Hoskinson.
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Midnight Network focuses on privacy through zero-knowledge authentication technology, specifically ZK-SNARKs. The NIGHT token has increased over 150% in the last seven days. The project also won BeenCrypto's “Best of the Year” award.
The growing demand for nighttime is driving the demand for ADA. According to the Taptool trading platform, NIGHT has recorded a DEX trading volume of over 85 million ADA in the last five days. Additionally, ADA holders can get overnight access by incorporating their ADA.
3. Pippin
Pippin is a meme coin that has gained a lot of attention of late. Its market capitalization rose from less than $60 million to $350 million in three weeks.
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The liquid temperature map indicates that the cumulative potential of the long liquid is higher than that of the short liquid. This data indicates that many short-term traders still expect prices to continue to rise.
However, this hope brings great danger. A recent analysis by the chain data tracking account Night Trader Group found that 93 wallets currently account for 73% of the total supply.
These wallets are divided into three main collections. Each cluster exhibits distinct origins and patterns of behavior. According to Evening Trader Group, this stock may be the main driver behind the price increase. On the other hand, selling pressure can come out at any time.
Additionally, the account associated with the project (ThePipinCo) has not posted any updates since June. This silence threatened the team's commitment to the project.
If PPP goes below $0.30 this week, more than $9 million could be spent on long positions. This figure is likely to be higher if PPP suffers a sharp drop similar to the fate of other synthetic meme tokens.
