Altcoins at Risk: Three Cryptocurrencies Facing Possible Liquidations This January

While positive market sentiment is making a comeback at the start of January, caution remains for altcoins due to potential liquidation risks.

Key Takeaways

Ethereum (ETH) is experiencing a surge in new holders and high on-chain activity, but rising leverage poses a liquidation risk.
Bitcoin Cash (BCH) is nearing a significant resistance level of $650, with high open interest indicating potential price corrections.
Pepe (PEPE) has seen substantial gains, but market volatility and upcoming profit-taking could lead to liquidation events.

As various altcoins attempt to recover, some could trigger significant liquidations based on past derivative data approaching critical thresholds. Let’s take a closer look at three notable altcoins.

1. Ethereum (ETH)

Ethereum (ETH) has several factors supporting long positions this week. The number of new ETH holders has increased sharply, with the staking entry queue surpassing the exit queue. Additionally, Ethereum transactions have reached the highest volume in a decade.

As a result, traders have ramped up capital and leverage for long positions, pushing potential long liquidations significantly above short ones.

ETH Exchange Liquidation Map. Source: Coinglass

However, one alarming metric has emerged—ETH’s estimated leverage ratio has reached an all-time high. This ratio, calculated as the exchange's open interest divided by coin reserves, indicates the average leverage traders are deploying. When this value rises, it suggests more investors are engaging in high-risk derivatives trading.

Ethereum Estimated Leverage Ratio. Source: CryptoQuant

While long-term traders may experience short-term profits as bullish trends develop, the rising leverage is a serious red flag. ETH could face a major liquidation event if prices drop to the $2,800 range, with potential long liquidations exceeding $5.8 billion.

2. Bitcoin Cash (BCH)

Peter Brandt, a seasoned investor, recently drew attention to Bitcoin Cash, noting it is nearing the crucial $650 resistance level. A breakout here could lead to new price expectations.

According to a recent report, there are various factors suggesting that BCH may continue to rise. Derivatives traders appear optimistic, allocating more leveraged capital to long positions than short ones.

BCH Exchange Liquidation Map. Source: Coinglass

However, there is a significant concern reflected in Coinglass data: BCH open interest has hit $980 million, marking a record high. Historically, when BCH open interest exceeds $600 million, it often precipitates sharp and prolonged price corrections.

BCH Open Interest. Source: Coinglass

Additionally, as BCH trades near the $650 resistance level, profit-taking pressure could emerge at any moment. Should BCH decline to the $570 level this week, cumulative long liquidations could surpass $80 million.

3. Pepe (PEPE)

The capital movements at the start of January indicate a shift towards meme coins, reigniting enthusiasm for a potential new meme coin season. Predictions that PEPE’s market cap might reach $69 billion by 2026 are contributing to an optimism surrounding the token.

PEPE’s liquidation map shows that if the price falls to $0.00000613, long liquidations could exceed $15 million, representing roughly a 10% decrease from current levels.

PEPE Exchange Liquidation Map. Source: Coinglass

Given that PEPE has surged over 70% since the year began, early investors are currently holding onto profits and may opt to cash out amidst ongoing market uncertainty. Analysts have also pointed to a possible Elliott Wave correction, suggesting that PEPE might have completed its third upward wave.

“We might see a pullback next week. Wave (3) could still extend, but given the significant upward movement from our support zone, the risk has increased. The structure of the pullback is crucial. If the bulls can defend...” — More Crypto Online (@Morecryptoonl)

The cryptocurrency market is expected to experience ongoing volatility in the coming days amid rising geopolitical tensions. Unless traders learn from past mistakes that led to over $150 billion in liquidations in 2025, a repeat of similar losses in 2026 could be likely.