Extreme fear returned in the final week of March, prompting more aggressive short-selling. However, some altcoins with unique catalysts may pose risks to these short positions.
Traders of Solana (SOL), Hyperliquid (HYPE), and Bittensor (TAO) should pay attention to the risks that could threaten their positions this week.
1. Solana (SOL)
Solana’s 7-day liquidation map shows a significant imbalance between potential liquidation volumes of long and short positions.
Short positions could face losses of up to $680 million if SOL rebounds to $96 this week.
What factors could support a SOL recovery this week? Reports from BeInCrypto highlight at least two key drivers.
- First, exchange flows reversed sharply after March 17. Daily outflows reached 700,000 SOL. This trend suggests that many investors may be accumulating SOL during the downturn.
- Second, Solana DEX trading volume surged 103% to $138.4 billion over the past week. This marks the highest level in a year.
These factors indicate that demand for SOL may be increasing. This could put short positions at risk of liquidation.
2. Hyperliquid (HYPE)
Similar to SOL, HYPE’s liquidation map also shows that potential short liquidations dominate.
If HYPE rises above $42, short liquidations could exceed $60 million.
The escalating tensions between the United States, Israel, and Iran may positively impact demand for HYPE through the HIP-3 market. This market allows trading of oil, metals, and stock index contracts.
Hyperliquid HIP-3 market data shows approximately $14.39 billion in trading volume over the past 7 days. Open interest stands at around $1.73 billion.
“We believe the next leg for HYPE depends less on crypto market share and more on HIP-3 opening a 24/7 market for non-crypto assets,” Alea Research stated.
HYPE’s unique catalyst may allow it to move against the broader negative sentiment in the crypto market. This creates risk for short positions.
3. Bittensor (TAO)
Bittensor (TAO) is attracting increasing interest from altcoin investors as they become more selective in portfolio allocation.
A recent report from LunarCrush, a social analytics platform focused on crypto markets, shows that community discussions about TAO rose 112% over the past 30 days. Mentions reached 3.86 million in just 24 hours.
This surge follows Jensen Huang’s mention of Bittensor in a recent podcast. Grayscale also opened a private placement for its TAO fund. In addition, TAO subnets are showing growth in both revenue and community engagement.
If this positive sentiment continues, TAO’s price could benefit.
The liquidation map shows that if TAO rebounds above $307, potential short liquidations could reach $27 million.
Short sellers have valid reasons to expect further downside, given rising macroeconomic concerns and geopolitical tensions. However, without proper profit-taking strategies, these unique catalysts could lead to more complex price volatility.
The post 3 Altcoins Face Major Liquidation Risk in the Final Week of March appeared first on BeInCrypto.
