Altcoin season is not yet back, but some altcoins have performed stronger than the rest of the market in the second week of November. However, these same tokens also face the risk of causing large-scale liquidations for short-term traders.
Which altcoins are they? And what risks are involved in trading their derivatives?
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1.XRP
Short-term trader sentiment on XRP remains very optimistic as Canary Capital prepares to launch its spot XRP ETF on November 13th.
Additionally, five XRP spot ETFs were featured on the DTCC list: Franklin Templeton, Bitwise, Canary Capital, 21Shares, and CoinShares. This development strengthens investor confidence that multiple XRP ETFs may soon be approved.
The 7-day liquidations map shows a significant concentration of potential long-term liquidations, suggesting that many traders are expecting XRP prices to rise this week.
However, BeInCrypto’s latest analysis reveals a sharp decline in new XRP addresses over the past week, indicating that interest from new investors is waning. Additionally, the MVRV long/short spread has declined, increasing the likelihood of a price correction.
If XRP falls towards $2.10 this week, long positions could face liquidations of more than $340 million. Conversely, if XRP rises to $2.75, the short position could be liquidated for approximately $69 million.
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2. Zcash (ZEC)
Zcash (ZEC)’s rise shows no signs of slowing down in the second week of November. ZEC reached $750 before consolidating to around $658, but many traders still expect the price to rise towards $1,000.
The 7-day liquidation map reveals that short-term derivatives traders are allocating more capital and leverage to long positions. This means that if ZEC experiences a correction this week, it could face larger losses.
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If ZEC falls to $540, over $72 million of long positions could be liquidated. Conversely, if ZEC spikes to $760, approximately $44 million of shorts could be wiped out.
Analysts warn that ZEC is forming a classic parabolic uptrend after a 10x increase and is perhaps nearing the final stage of the pattern.
“I just sold 90% of ZEC. I’m bullish on the privacy argument, but parabolic charts rarely hold in the short term without meaningful retrace. There’s too much short-term FOMO,” said investor Gunn.
3. Starknet (STRK)
Starknet (STRK) surprised the market with a 30% daily jump in the second week of November, recouping losses from last month’s plunge.
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Several analysts have suggested that STRK could break through long-term resistance and begin a powerful new bull market.
Liquidation Map data reflects this near-term bullish sentiment, showing a predominance of liquidation potential for longs over shorts.
However, CryptoRank reports that STRK is one of the top 7 altcoins with major token unlocking this week. Over 127 million STRK tokens have been unlocked, adding significant selling pressure and potentially disrupting the plans of long leveraged traders.
If STRK falls to $0.128, approximately $14 million of long positions could be liquidated. On the other hand, if the price breaks above $0.20, the short position of approximately $1.78 million could be wiped out.
