The cryptocurrency market has seen record liquidation events of over $19 billion, with most of the liquidated positions being long. The shock has made derivatives traders more cautious. However, some altcoins seem to be bucking that trend.
While some altcoins such as BNB and ZEC are still heavily FOMOed by investors, many traders remain uncertain about the next direction for Ethereum (ETH).
Sponsored Sponsored
1. Ethereum (ETH)
Total open interest on ETH fell from $63 billion to $48 billion last week, indicating that traders have reduced short-term leveraged positions in the market’s leading altcoins.
However, short-term bearish sentiment still dominates ETH traders. This imbalance can be seen in the liquidation map, where short-term liquidations (on the right) slightly outnumber long-term liquidations.
Analysts recently outlined several reasons supporting a V-shaped recovery scenario for ETH. As the price of ETH falls to nearly $3,500, large investors are accumulating ETH, with President Trump’s latest comments calming market sentiment.
Investor Mnpunk.eth said, “I wouldn’t be surprised if there is a V-shaped recovery in the next week or two.”
If ETH continues its recovery and climbs towards $4,600 this week, the potential short interest liquidation could reach $5.6 billion. Conversely, if ETH falls below $3,700, an estimated $3.5 billion worth of longs could be wiped out.
Sponsored Sponsored
2. Binance Coin (BNB)
BNB stands out in the recent economic downturn. BNB has soared to a new all-time high (ATH) while many altcoins struggle to regain their previous highs.
However, this price action has created a large imbalance in the liquidation map. Long liquidations are significantly higher than shorts, reflecting FOMO-driven leverage among short-term traders.
These long traders continue to actively bet with high leverage that BNB’s price will rise, exposing them to greater losses if the market moves against them.
A recent analysis of BeInCrypto reveals potential risks. The group of investors who have held BNB for 6-12 months have significantly reduced their holdings from 63.89% to 18.15%, indicating profit-taking and a decline in short-term confidence.
Sponsored Sponsored
If BNB corrects to $1,150 this week, long traders could face liquidations of more than $300 million. On the other hand, if BNB rises above $1,500 and sets a new high, approximately $150 million of short positions will be liquidated.
3. Zcash (ZEC)
In October, several KOLs supported the idea that privacy culture in blockchain is being reawakened.
ZEC’s remarkable resilience during last Friday’s selloff lends further credibility to this argument. Privacy coins avoided major losses and bucked the panic trend to reach new all-time highs.
Entering the third week of October, ZEC’s long and short traders appear to be evenly matched, as reflected in the equilibrium liquidation map.
Sponsored Sponsored
If ZEC continues its upward momentum and climbs above $315, short positions of over $20 million could be liquidated. Conversely, if the price declines towards $227, approximately $17 million of long positions could face liquidation.
Regardless of direction, liquidation risk remains high. According to CoinGlass data, total open interest on ZEC exceeded $300 million, marking the highest level since 2020.
These three altcoins represent different sentiments regarding short-term derivatives.
ETH traders are leaning bearish and betting short positions. BNB traders remain optimistic and expect further gains. ZEC traders are balanced, but with increased exposure on both sides.
This divergence highlights the growing complexity of market volatility as October progresses.
