3 Altcoins at high risk of liquidation in the second week of October

The total market capitalization of the crypto market reached a new all-time high in October, surpassing 4 trillion USD. Bitcoin along with the top altcoins is attracting most of the liquidity, indicating that their potential liquidation volume is significantly increasing.

This article will highlight the potential risks that top altcoins are facing, which could trigger large-scale liquidations for short-term traders using excessive leverage in the second week of October.

Ethereum (ETH)

According to a report from Messari in early October, institutional investors (DATs) are currently holding a larger percentage of the ETH supply compared to BTC. This confirms that the accumulation demand for ETH remains very strong.

Rick, an analyst at Messari, predicts: "The increase in ETF inflows, the approval of the ETH staking ETF, and the expansion of global liquidity will be the key factors driving the next price surge of ETH."

Short-term traders have become more confident in their long positions, expecting ETH to reach new highs this month. This explains why the total liquidation volume for long positions has recently surpassed that of short positions.

ETH exchange liquidation map | Source: Coinglass. According to Coinglass, if ETH drops to 4,030 USD this week, over 9 billion USD in long positions could be liquidated. Conversely, if ETH rises above 5,000 USD, about 2 billion USD in short positions could be wiped out.

However, there are warning signs that traders setting long orders may be overlooking:

If selling pressure continues to increase this week, mass liquidations of long positions may occur.

XRP

In October, the United States Securities and Exchange Commission (SEC) will review several ETF applications for XRP from major financial institutions such as Franklin Templeton, Hashdex, Grayscale, ProShare, and Bitwise.

Crypto analyst King predicts: "Some of the biggest names in the industry are getting involved, with fund sizes ranging from 200 million to 1.5 trillion USD. If even one of these is approved, it could bring a major wave of institutional money into XRP."

This optimism has led traders to heavily bet on a bullish trend for XRP. The liquidation map shows a clear imbalance, with long positions dominating.

XRP Exchange Liquidation Map | Source: Coinglass. If XRP drops to 2.65 USD this week, about 560 million USD in long positions could be liquidated. Conversely, if it rises to 3.3 USD, about 370 million USD in short positions could be wiped out.

However, some warning signs have emerged for long traders of XRP:

These are strong signs of profit-taking, posing significant liquidation risks for over-leveraged long positions.

Binance Coin (BNB)

BNB has continued to set new highs in October, trading above 1,200 USD. Traders seem to be caught up in a price surge due to FOMO, rushing into long positions to gain short-term profits.

The 7-day liquidation map shows that if BNB drops to 1.034 USD, the total liquidation of long positions could exceed 300 million USD. Conversely, if it rises to 1.340 USD, the total liquidation of short positions will be around 80 million USD.

BNB exchange liquidation map | Source: Coinglass. Although BNB still has the potential to extend its rally, the total open interest (OI) for BNB in October has exceeded 2.5 billion USD — the highest ever. Historical data shows that OI increases for BNB often precede significant market corrections.

Open contract of BNB | Source: CoinglassTraders who set long orders can still make a profit if the upward trend continues. However, without strict risk management, they will face the risk of heavy liquidation losses if BNB experiences a sudden reversal.

Mr. Teacher