Three Altcoins That Might Trigger Major Liquidations in Mid-January

As we enter the third week of January, overall market liquidations have surged to nearly $900 million. This spike is largely attributed to negative volatility stemming from Trump’s tariffs impacting the EU. The situation may worsen as several altcoins show signs of instability.

Key Takeaways

Total market-wide liquidations reached nearly $900 million, mainly due to negative volatility caused by Trump's tariffs on the EU.
XRP's recent price fluctuations indicate potential short liquidations, especially if it rebounds to $2.29.
Axie Infinity (AXS) has gained over 120% year-to-date, but rising exchange deposits suggest many investors may seek to sell, risking Long positions.
Dusk (DUSK) has seen significant price growth recently, but profit-taking pressures and geopolitical concerns may threaten its uptrend.

XRP, Axie Infinity (AXS), and Dusk (DUSK) are currently drawing investor interest this week for various reasons. Nevertheless, these altcoins could pose risks to investors lacking robust risk management strategies.

1. XRP

On January 19, XRP fell to $1.85 but quickly bounced back to $1.95. This drop wiped out much of the progress made since the year's start. Short-term traders seem to have a bearish outlook, with many betting on further downward movement. The 7-day liquidation map indicates that potential short liquidations outnumber long positions.

Data on liquidations suggests that if XRP manages to bounce back to $2.29 this week, short positions could face liquidations exceeding $600 million. This scenario may develop if concerns regarding Trump’s new tariffs dissipate rapidly, and strong buying interest around the $1.80 mark supports a rebound.

Another important indicator is XRP’s spot average order size. Data from CryptoQuant shows that whenever XRP trades below $2.4, large orders from whales frequently appear, indicating robust demand from major investors at lower price points.

“Whale interest is at a record high for 2026. Large orders dominate trading, suggesting that 'Smart Money' is positioning for the next upward movement,” commented an analyst from CryptoQuant.

If whale accumulation can offset temporary market fears, XRP may quickly recover, potentially forcing short traders into liquidation.

2. Axie Infinity (AXS)

Axie Infinity (AXS) has surprisingly re-emerged as a top trendsetter in the third week of January, boasting a year-to-date gain of over 120%. This rally stemmed from the founders' announcement to convert rewards into a new utility token, bAXS, as part of an extensive tokenomics restructuring planned for 2026.

The 7-day liquidation map for AXS indicates a possible liquidation volume of around $12 million. However, the pricing needed for liquidating Long positions is narrower compared to Short positions, reflecting that many traders anticipate further upward movement in the short term.

Moreover, data has revealed that AXS’s recent surge coincides with a marked increase in exchange deposits. The average number of deposit transactions over the past week has hit a three-year high.

This trend highlights that a considerable number of investors may be looking to exit as prices recover, potentially creating selling pressure at any moment, which could jeopardize Long positions.

3. Dusk (DUSK)

Dusk has positioned itself as a notable player within the emerging interest in privacy coins, with its rally reflecting a capital shift from larger-cap privacy currencies to smaller-cap alternatives. Despite nearly a sixfold increase in value since the beginning of the year, DUSK has already caused considerable short liquidations over the past four days as short-term traders continue to invest in bullish positions.

DUSK's liquidation map indicates that potential Long liquidations are predominant. If the price decreases this week, Long positions could face significant risks.

A recent report from BeInCrypto points out that DUSK inflows to exchanges have been rising, hinting at potential profit-taking and selling pressure. The token is experiencing upward momentum amid renewed market anxieties over Trump’s tariffs on Europe, which could endanger its uptrend.

Just last October, DASH surged six-fold following capital rotation from ZEC to smaller privacy coins, only to see a 60% drop the following week. DUSK may face a similar fate. Should DUSK's FOMO (Fear of Missing Out) diminish, and if prices dip below $0.13, total Long liquidations could climb to $12 million.

These three altcoins exhibit very different, and even opposing, sentiments among short-term traders. This complexity arises from geopolitical influences interacting with inherent market trends. Without robust stop-loss strategies in place, both Long and Short positions may face significant liquidation losses.