3 altcoins face liquidation risks in the third week of December

According to the Cryptocurrency Fear & Greed Index, market sentiment in the third week of December continues to be dominated by fear, with the score reaching extreme levels. This pessimistic sentiment has facilitated short positions dominating the market.

However, some altcoins possess unique momentum that could trigger the liquidation of short positions. So, what are these potential altcoins, and what risks are they facing?

Solana (SOL)

The 7-day liquidation heatmap data for SOL shows that potential short position liquidations are twice as high as long positions.

Specifically, if the price of SOL rises to $147 this week, short holders could face losses of up to $1 billion. Conversely, if SOL drops below $120, long positions could be liquidated with a total value of around $500 million.

SOL Liquidation Map | Source: Coinglass Several factors suggest investors should be cautious when maintaining short positions this week:

These factors reinforce SOL’s recovery prospects this week while increasing the risk of short position liquidations.

Cardano (ADA)

Similar to SOL, the overall negative market sentiment has prompted short-term ADA derivatives traders to increase their capital allocation and leverage for short positions.

As a result, the total potential liquidation volume of short positions has surged. If ADA rises to $0.45 this week, short positions could incur losses of up to $50 million. Conversely, if ADA drops to $0.35, long positions could be liquidated for about $19.5 million.

ADA Liquidation Map | Source: Coinglass An important factor for ADA short sellers to consider in order to minimize risk is the positive sentiment surrounding the Midnight project.

Midnight Network is a new blockchain developed by Input Output Global (IOG), the company behind Cardano, founded by Charles Hoskinson. The project focuses on security through zero-knowledge proof technology (zero-knowledge proof), especially ZK-SNARKs. The NIGHT token has increased over 150% in the past seven days and recently won the “Breakthrough of the Year” award from BeInCrypto.

The strong demand for NIGHT is driving demand for ADA. According to the trading platform Taptool, NIGHT has recorded trading volumes on DEX exceeding 85 million ADA in recent five days. Additionally, ADA holders can earn NIGHT through staking ADA.

PIPPIN

PIPPIN is a meme coin that has attracted significant attention towards the end of the year, with its market capitalization soaring from below $60 million to over $350 million in just three weeks.

The liquidation heatmap shows that the total potential liquidation volume of long positions remains higher than that of short positions, reflecting short-term investors’ bullish expectations.

PIPPIN Liquidation Map | Source: Coinglass However, these expectations carry significant risks. Recent analysis from the on-chain data tracker Evening Trader Group indicates that 93 wallets currently hold 73% of the total PIPPIN supply. These wallets are divided into three main accumulation clusters with different origins and behaviors. According to Evening Trader Group, this accumulation is a key driver of the price increase, but selling pressure could emerge at any time.

Additionally, the project account (ThePippinCo) has not posted any updates since June, raising concerns about the team’s commitment.

If PIPPIN drops below $0.30 this week, over $9 million in long positions could be liquidated — this number could be even higher if a sharp decline occurs, similar to many meme tokens that have been manipulated in the past.