The cryptocurrency market is always full of surprises, especially during periods of macroeconomic uncertainty. In December, altcoins are moving in a sideways trend with significant liquidation risks looming for certain assets. Traders and investors are keeping a close eye on developments that could influence market movements and lead to substantial gains or losses. Here’s what you need to know about three key altcoins facing liquidation risks this month.
Zcash (ZEC): A Privacy Coin Under Pressure
Zcash (ZEC), a leading privacy-focused cryptocurrency, has been under significant selling pressure, with its price falling by 50% from last month’s all-time high of $748. Despite this, optimism remains among investors banking on a December rebound.
The excitement stems in part from the upcoming appearance of Zooko Wilcox, the founder of Zcash, at the U.S. Securities and Exchange Commission’s (SEC) event on December 15, where issues related to cryptocurrency, financial oversight, and privacy are expected to be discussed. However, without proper risk management strategies like stop losses, traders holding long positions could face up to $98 million in liquidations if ZEC dips towards $295 this week.
For those interested in privacy coins like ZEC but seeking smarter investment routes, consider diversifying with products like the Ledger Nano X hardware wallet, which ensures secure storage for your assets.
Aster (ASTR): Can Buybacks Save the Day?
Aster, a leading decentralized exchange (DEX) built on the Binance Smart Chain, is another altcoin to watch. After benefiting greatly from the boom of perpetual DEXs in September, its price has since dropped more than 60%, trading below $1. However, an accelerated $4 million daily buyback program announced on December 8 has renewed hope.
Should Aster’s price rise back to $1.07, short sellers could face liquidation volumes exceeding $32 million. Analysts note the asset has bounced from a critical support zone, with technical patterns suggesting a potential trend reversal. While volatility remains high, this could present an excellent entry opportunity for short-term investors.
Bittensor (TAO): Anticipation Ahead of the First Halving
Bittensor (TAO) is creating buzz ahead of its first-ever halving event on December 14. The halving will see daily token issuance reduced from 7,200 TAO to 3,600, in line with its eventual supply cap of 21 million tokens. Historically, halvings in the crypto space, such as Bitcoin’s, have led to increased scarcity and value appreciation.
Current liquidation maps show that long positions on TAO far outweigh shorts. If price falls to $243.50, these traders may face nearly $17 million in losses, whereas a rise to $340 could trigger $5 million in short-side liquidations. However, traders must remain cautious, as external factors like the Federal Reserve’s interest rate decision this week might overshadow crypto-specific events.
How to Navigate Volatility
The second week of December is set to be turbulent, with traders needing to consider both market-specific and external events. As the Fed prepares to announce its interest rate decision, volatility may spike, impacting assets across the spectrum. Whether you’re trading ZEC, ASTR, TAO, or any other cryptocurrency, proper stop-loss strategies and portfolio diversification remain key to minimizing risks.
Additionally, using tools such as secure wallets, advanced trading platforms, and reliable educational resources can prepare investors for the unpredictable world of cryptocurrency investment.
