The altcoin derivatives market in the closing days of September exhibits a significant imbalance between the total accumulated Long and Short positions. This discrepancy arises from over $200 billion in market capitalization being eliminated, causing many altcoins to decline.
In this scenario, short-term traders display a pronounced bearish outlook as the potential for Short liquidations intensifies.
1. Ethereum (ETH)
Sponsored
Sponsored
Ethereum experiences the highest potential liquidation volume among altcoins during the last week of September. The 7-day liquidation map indicates that traders are directing more capital and leverage towards Short positions, elevating Ethereum’s potential liquidation volume into the billions.
At the time of writing, ETH’s price has plummeted over 5%, falling from above $4,400 to below $4,200.
If ETH rebounds to $4,500 this week, total accumulated Short liquidations could hit $4.5 billion. Should positive developments aid ETH in recovering its recent losses to surpass $4,900, total Short liquidations might reach $10 billion.
Traders have solid justifications for increasing Short exposure. A recent BeInCrypto report highlights that the number of profitable ETH addresses is at an all-time high, while Ethereum whales begin to realize profits at historic levels.
However, the price decline of ETH could spark new demand. Accumulation of ETH shows no signs of abating. Such demand could attract institutions and companies to purchase, leading to a rebound that might liquidate Short positions.
Sponsored
Sponsored
Solana ranks as the second contender in potential liquidation volume this week.
Today’s more than 7% decline has heightened overwhelmingly bearish sentiment among derivatives traders. Consequently, total potential Short liquidations considerably exceed Long liquidations.
The 7-day liquidation map indicates that should SOL recover to $250 this week, over $2.5 billion in Short positions could be liquidated. Conversely, if SOL drops below $190, approximately $215 million in Long positions could face liquidation.
Sponsored
Sponsored
A few days prior, the SEC approved the Grayscale Digital Large Cap Fund (GDLC), marking the first multi-asset crypto ETP holding BTC, ETH, XRP, SOL, and ADA. The SEC has also set general listing standards for ETFs. These developments are notably advantageous for SOL.
If the current sell-off subsides and these positive catalysts persist, SOL’s price may recover, placing Short positions in jeopardy.
3. Avantis (AVNT)
While AVNT may not boast liquidation potential in the billions like Ethereum or Solana, its popularity secures its position on this list. According to CoinMarketCap Trending, Avantis currently garners significant market attention.
The interest in AVNT is fueled by its concurrent listing on three prominent exchanges: Upbit, Bithumb, and Binance. Its price has surged over 600% throughout September.
Derivatives traders persist in betting on further upside, as indicated by the prevalence of potential Long liquidations.
Sponsored
Sponsored
The liquidation map illustrates that if AVNT corrects to $1, around $60 million in Long positions could be liquidated. Conversely, should AVNT recover to $2.6, more than $21 million in Short positions could face liquidation.
Early investors are currently enjoying substantial profits from this altcoin’s explosive growth. Many may opt to take profits soon. On-chain data confirms that an AVNT whale realized profits today, exceeding 700%. If this profit-taking spreads, Long positions could be significantly at risk.
The market has entered the final week of September grappling with considerable liquidation losses. A recent BeInCrypto report highlighted several factors contributing to this outcome.
“In the past 24 hours, 387,148 traders were liquidated. The total liquidations reached $1.67 billion,” Coinglass reported.
These figures are likely to remain high in the coming days as late-September volatility becomes increasingly unpredictable.
