Despite a decline in total open interest within the crypto market in October, indicating a cooling of leveraged exposure among altcoin investors, there are still several altcoins that present significant risk for major losses.
Which altcoins are at risk, and what factors might be influencing them? Here’s an in-depth look.
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1. Solana (SOL)
In October, Solana (SOL) fell below $200, sparking increasing anxiety among investors. A significant number of holders have moved SOL to exchanges, indicating a readiness to sell.
A recent BeInCrypto report highlighted that Solana investors sent 688,000 SOL, valued at over $132 million, to exchanges last week.
The 7-day liquidation map also shows a bearish outlook, with short liquidation levels ranging from $193 to above $200 (illustrated on the right-side bar chart).
However, this pessimistic outlook might reverse, as several indicators suggest SOL could experience positive momentum this week.
Initially, Solana is entering a week full of promising ecosystem events that could inspire short-term optimism. Additionally, analyst Lark Davis pointed out that SOL’s price structure seems to be forming a double bottom, with a potential upward target of $250.
Furthermore, BeInCrypto reported that a16z invested $50 million in Jito to enhance Solana’s MEV infrastructure.
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If SOL successfully recovers above $214 this week, more than $1 billion in short positions might be liquidated. Conversely, if it dips below $165, around $800 million in long positions could face liquidation.
2. Bittensor (TAO)
Bittensor (TAO) not only rebounded sharply after the market crash on October 11, but also captured significant community interest in the DePIN (Decentralized Physical Infrastructure Networks) space this October.
While most altcoins faced steep declines, investors became more discerning, gravitating towards projects with stronger fundamentals, with TAO emerging as a favored selection.
Recent actions by Grayscale have bolstered institutional confidence in TAO. The firm allocated over 33% of its Grayscale Decentralized AI Fund to TAO and filed a Form 10 with the SEC for the Grayscale Bittensor Trust.
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From a technical analysis perspective, analyst Crypto Eagles suggested that TAO’s current price structure resembles Zcash (ZEC) during its early phases—indicating that TAO could soon witness strong upward movements with wide price ranges.
Short sellers might find this trend challenging. If TAO increases to $500 this week, they could incur losses of over $20 million. Conversely, should TAO fall to $381, long traders would risk $18 million in liquidations.
3. ChainOpera AI (COAI)
ChainOpera AI (COAI) surfaced as one of October’s standout performers, with its market cap skyrocketing from under $100 million at the start of the month to over $5 billion in a matter of weeks.
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Nonetheless, this rapid ascent came with a downside. COAI has since plummeted nearly 90% from its peak of $46. The sharp downturn prompted a surge in short positions, resulting in a significant imbalance in the liquidation map.
Data indicates that if COAI recovers above $7 this week, approximately $11.5 million in short positions could be liquidated. In contrast, should it decrease to $3.73, about $2.7 million in long positions would be at risk.
In light of this situation, short traders should proceed with caution. After a 90% correction, buying pressure could return, leading to potential short squeezes.
Renewed interest from both retail and institutional investors in AI-focused crypto projects has many traders believing COAI’s journey is far from over—and that the token may soon regain some of its lost value.
While each of these altcoins has distinct catalysts that could inspire recovery, the broader altcoin market continues to face significant selling pressure. October presents a complex and precarious situation for both long and short positions alike.
