September has started with high volatility in the cryptocurrency market, as several altcoins face significant liquidation risks. Key data and market trends reveal imbalances in short and long positions, creating opportunities and risks for traders. In this article, we highlight the top three altcoins at risk of major liquidations this month and the factors driving their potential price movements.
1. Ethereum (ETH)
Ethereum’s 7-day liquidation map exposes a concerning imbalance. If ETH’s price rises to $4,925, short liquidations could exceed a staggering $6 billion. On the other hand, falling below $4,000 would trigger liquidations of long positions valued at approximately $3.96 billion.
Recent on-chain activity suggests short-term sentiment may favor shorts. However, large-scale whale transactions indicate otherwise, as significant Bitcoin was sold to purchase Ethereum. According to Lookonchain, a Bitcoin whale converted 2,000 BTC into nearly 48,942 ETH, amounting to $4 billion in Ethereum purchases. These aggressive moves could shift market sentiment, potentially driving ETH prices higher and prompting heavy losses for short positions.
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2. XRP
XRP is under the spotlight as its liquidation map reveals a precarious situation. A price move to $3 could force the liquidation of over $500 million in short positions, while falling to $2.42 would result in only $200 million in liquidated longs. Analysts note that the current price support at $2.70 may act as a rebound point, putting shorts at greater risk.
Adding to the bullish sentiment, the Securities and Exchange Commission (SEC) is reviewing 15 applications for XRP ETFs. A positive regulatory outcome could send prices surging, increasing vulnerability for short sellers.
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3. Pyth Network (PYTH)
Pyth Network, though lesser-known, is making waves due to recent developments. On August 28, news of a partnership between the US Department of Commerce, Pyth, and Chainlink to put GDP data on the blockchain sparked massive interest. This has led to a price spike and growing vulnerability for traders.
If PYTH’s price drops below $0.15, nearly $9 million in long positions could face liquidation. However, a rally to $2 could accumulate short liquidations of over $10 million.
While the potential remains high for a bullish breakout, seasoned traders warn of a possible “sell the news” scenario, leading to a price correction. Traders are advised to proceed with caution when betting on short-term trends.
The Final Word
As September unfolds, Ethereum, XRP, and Pyth Network are at the center of significant market movements. For crypto enthusiasts and traders, it is essential to monitor these altcoins to stay ahead in this dynamic market. Remember, trading cryptocurrencies involves risk, and it is crucial to employ strategies that minimize potential losses while maximizing gains.
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