The cryptocurrency market has recently experienced a record liquidation event surpassing $19 billion, predominantly involving long positions. In the aftermath, derivatives traders are adopting a more cautious approach. Nevertheless, some altcoins seem to resist this trend.
Altcoins like BNB and ZEC continue to attract significant FOMO from investors, while many traders remain unsure about the future direction of Ethereum (ETH).
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1. Ethereum (ETH)
The total open interest in ETH fell from $63 billion to $48 billion last week, indicating that traders have scaled back on short-term leveraged positions in the leading altcoin.
However, a prevailing short-term bearish sentiment still lingers among ETH traders. This is evident on the liquidation map, where short liquidations (on the right side) slightly outnumber long liquidations.
Analysts have recently pointed out several factors supporting a V-shaped recovery scenario for ETH. Large investors have been accumulating ETH as its price approaches $3,500, and recent statements from Trump have helped soothe market sentiment.
“I wouldn’t be shocked if we witness a V-shaped recovery in the next 1–2 weeks,” investor Mnpunk.eth, stated.
If ETH continues to recover and climbs towards $4,600 this week, potential short liquidations could reach $5.6 billion. Conversely, if ETH falls below $3,700, approximately $3.5 billion worth of longs could be liquidated.
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2. Binance Coin (BNB)
BNB has distinguished itself during the recent downturn. While many altcoins faced difficulties returning to prior highs, BNB escalated to a new all-time high (ATH).
This price behavior has led to a significant imbalance in its liquidation map. The volume of long liquidations massively outweighs that of shorts, highlighting FOMO-driven leverage among short-term traders.
These long traders continue to wager heavily with high leverage on BNB’s price rise, putting them at risk of substantial losses should the market turn against them.
Recent analyses from BeInCrypto have revealed potential risks. Investors holding BNB for 6–12 months have significantly decreased their holdings from 63.89% to 18.15%, indicating profit-taking and a drop in short-term confidence.
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If BNB corrects to $1,150 this week, long traders could contend with over $300 million in liquidations. Conversely, if BNB rises above $1,500 and sets a new high, approximately $150 million in short positions would be liquidated.
3. Zcash (ZEC)
In October, several prominent figures supported the notion that the privacy culture in blockchain is making a comeback.
This argument gained credibility after ZEC demonstrated impressive resilience during last Friday’s sell-off. The privacy coin managed to sidestep major losses and moved against the market panic, achieving a new all-time high.
As we enter the third week of October, long and short traders on ZEC seem evenly matched, as indicated by the balanced liquidation map.
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If ZEC maintains its upward trend and exceeds $315, over $20 million in short positions could be liquidated. Conversely, a drop towards $227 could result in approximately $17 million in long positions facing liquidation.
Regardless of the direction, liquidation risks remain high. CoinGlass data indicates that ZEC’s total open interest has surpassed $300 million, the highest level since 2020.
These three altcoins showcase different sentiments surrounding short-term derivatives.
- ETH traders are leaning bearish and favoring short positions.
- BNB traders maintain optimism and anticipate further gains.
- ZEC traders are balanced but increasing exposure on both sides.
This divergence underscores the growing complexity of market volatility as October progresses.
