Why these Altcoins can liquidate long traders in early January
Short-term derivatives traders maintained long positions in several altcoins until late December. However, without strict stop-loss plans, these positions may face liquidation risks in early January.
Which altcoins are at risk and why can they cause significant liquidity losses? The following analysis explains the details.
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1. Solana (Sun)
Solana's 7-day liquidity chart shows severe volatility. Accumulated long-term liquidity is significantly greater than short-term liquidity.
Long traders have logical reasons to hold SOL positions at this level.
January has historically been a strong month for SOL price performance, according to the BeCrypto report. In addition, a strong RSI divergence confirmed the predictions of a rebound potential.
Long traders may make unexpected profits in the coming days. However, without profit plans, these long positions can be at risk.
According to data from SoSoValue, SOL ETFs recorded their weakest weekly returns since their inception. Net income was only $13.14 million last week. That figure dropped more than 93% to $200 million in its debut week.
Although it has not yet recorded a single week of negative net inflows, this sharp decline strongly suggests that the ETF's demand for SOL has weakened. This trend may put pressure on SOL prices in early January.
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As a result, long positions require caution. If SOL falls to $110, cumulative long liquidity could exceed $880 million.
2. Zcash (ZEC)
Similar to SOL, ZEC's liquidity chart shows traders allocating capital and leverage to long positions.
ZEC, locked in shield pools, rose again at the end of December. The price of ZEC also recovered strongly during the month, rising from around $300 to $500. These factors support the case for holding long positions.
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However, risks can arise from traders who become too aggressive. After the December rally above 70%, ZEC could be corrected from a technical perspective. A retracement to test previous resistance as support would be normal price behavior.
Buyers taking profits in early December could trigger this correction. Such selling pressure creates the risk of holding liquid for long periods.
Additionally, a recent BeCrypto report suggests that ZEC whales are reducing their exposure. This behavior reflects increased vigilance after severe recovery.
If ZEC drops to the $466 zone in early January, long-term liquidity may exceed $78 million.
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3. Chainlink (LINK)
Many traders seem confident that LINK will soon recover from the $12 level. They provided significant capital and leverage on long positions.
“LINK holds the interest zone and begins to stabilize. As long as this support remains, the price will have room to push to $13.5, $14 and $15. A break below $11.5 will negate this setup and indicate low risk,” commented CryptoPulse.
One important sign should be noted. LINK stock on Binance increased in December.
According to CryptoQuant data, Binance's 7-day average LINK reserves have ended a two-month downtrend. The trend has started to reverse upwards.
This shift suggests that LINK holders may be preparing to sell as prices show signs of recovery. The liquidity map indicates that if LINK falls to $11, total long liquidity could reach $40 million.
