In the second week of September, the Altcoin Season Index reached its highest level in five years. Positive sentiment has pushed some altcoins to their all-time highs, attracting massive open interest. However, this also poses the risk of large-scale liquidation.
The next altcoin has shown signs of extreme FOMO in the third week of September, facing potential liquidation risks.
1. Ethereum (eth)
By mid-September, the Ethereum Reserve had reached a new peak of 4.9 million ETH, worth $22.2 billion. This figure excludes 6.7 million ETH held by the Ethereum ETF, and is worth $46.3 billion.
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A recent Beincrypto report highlights on-chain data suggesting that Ethereum prices could reach over $5,000. Derivative traders appear to share their beliefs, increasing leverage and long positions. This means that if ETH moves against expectations, their losses will be greater.
The liquidation map shows that if ETH drops to $4,046 this week, it will liquidate a longer position of over $8.8 billion. Conversely, if ETH rises to $5,000 as many analysts predict, a short position of about $4.8 billion would be liquidated.
Is there any reason to hope that ETH will decline? Beincrypto’s latest analysis noted that Ethereum’s profitable supply has recently reached 99.68%, reaching signs of potential profit acquisition.
Additionally, more than 2.6 million ETHs are currently queued for staking. The first trigger came from Kiln Finance, which was not organized to manage risk after issues tied to Swiss Borg.
However, as ETH prices rise, unstaking queues continue to increase, reflecting stronger for-profit demand.
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2. Binance Coin (BNB)
Binance Coin (BNB) reached an all-time high of $944 in September.
The rally followed news that Binance and Franklin Templeton had announced a new partnership to develop blockchain and crypto solutions for institutional adoption.
Similar to ETH, the BNB’s 7-day liquidation map shows the imbalance between the advantages and short positions. A long liquidation is dominant, indicating that many traders are betting on continuous profits.
If BNB is classified as $818 this week, long positions of over $189 million will be liquidated. Meanwhile, if BNB rises to $1,031, it wipes out its short position of around $103 million.
What risks should traders consider when considering BNB Long? One warning sign comes from a fully open interest (OI).
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Coinglass data shows that as of September 14th, the BNB total OI reached $1.72 billion. In the current quarter, OI has surpassed $1.5 billion three times. A 7% to 15% correction was triggered in both the previous two instances.
If history repeats itself, the third surge could lead to losses for traders holding BNB long.
3. MyxFinance (Myx)
Myx Finance (MYX) offered one of September’s most controversial gatherings. Beincrypto data shows that tokens have skyrocketed 450% over the past month.
However, Myx faces skepticism, including accusations of a Civil attack in its airdrop and fears of collapse, similar to Mantra (OM).
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Tokens have already fallen from the ATH of $18.9 to $10.9, down more than 40%. This pullback suggests that FOMO-led sentiment has been cooled.
As a result, derivative traders are leaning towards short positions. The 7-day liquidation map shows that if the shorts are wrong, you will face heavier losses.
Once Myx recovers to $12.35, it will liquidate a short position of over $19 million. If Myx is classified as $8.79, a longer position of $12 million or more will be settled.
Some tech analysts are hoping for a rebound, claiming that the $10-11 range is a strong support zone where investors may buy.
“A beautiful breakout with $myx and strong bounce from critical support areas. Great bounce chances are high. We’re targeting 12, 13, 14, 15, 16,” predicted Trader Bitcoin Harve.
Beincrypto’s latest analysis suggests that the current pullback is a temporary fix rather than a trend reversal.
