The crypto market enters the first week of February with an intensifying battle between bulls and bears. Bears still hold the advantage, but bulls appear to be spotting an opportunity. This situation makes price volatility more complex. Liquidation losses are increasing for both Long and Short positions.
Why should altcoins like Solana (SOL), Hyperliquid (HYPE), and Tron (TRX) be closely watched? The following article explores the details.
1. Solana (SOL)
In the early days of February, SOL briefly dropped below $100 amid broad market-wide negative pressure.
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The 7-day liquidation heatmap shows that potential liquidations from Short positions dominate. Leveraged short-term traders seem convinced that SOL could fall even deeper.
However, a price around $100 places SOL at its most important support zone over the past two years. Increasing leverage and capital to short at a major support level often comes with significant risk.
Recent BeInCrypto analysis highlights a sharp surge in new Solana addresses during January. More than 10 million new addresses were being created daily.
In addition, several emerging factors may support a recovery. These include user growth from meme coin launchpads, the expansion of the USD1 stablecoin, and SOL joining the privacy trend through GhostSwap.
Selling pressure driven by overall negative sentiment is now colliding with Solana’s own bullish catalysts around the $100 level. This conflict could lead to sharp wick movements. Both Long and Short traders may face liquidation losses.
CoinGlass data suggests that if SOL rebounds above $113 this week, Short liquidations could reach $500 million. On the other hand, if SOL continues falling toward $86, Long positions could suffer more than $142 million in liquidations.
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2. Hyperliquid (HYPE)
Hyperliquid (HYPE) is one of the few altcoins that has managed to maintain a 50% rally since the January 21 bottom. Most other altcoins have been setting new lows.
The liquidation map for HYPE shows a relatively balanced situation between Longs and Shorts. At the current price near $31, a move up to $35.5 could trigger around $80 million in Short liquidations. A drop toward $26 could also liquidate roughly $80 million in Long positions.
HYPE’s ability to rise against the broader market trend already represents a risk. BeInCrypto reports also indicate strong capital outflows, while the market lacks sufficient liquidity to sustain a recovery.
On the other hand, HYPE has its own catalysts. These include a 90% reduction in monthly team allocations. Demand for trading metal pairs on Hyperliquid has also supported the token’s price.
Bulls and bears have been neutralizing each other. Over the past four days, HYPE has formed consecutive spinning top candlestick patterns. This type of formation often signals that a large price swing may be approaching, increasing liquidation risk.
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3. TRX
Recently, a woman named Ten Ten (Zeng Ying), who claims to be Justin Sun’s former girlfriend, accused him of manipulating the TRON (TRX) market in its early stages. She stated that Sun allegedly instructed employees to register multiple Binance accounts under personal identities in order to execute coordinated trading activity.
These developments could spread negative sentiment among TRX holders, especially amid a wave of panic selling.
Short-term traders are betting on further downside. The liquidation heatmap shows that potential Short liquidations dominate. These could reach nearly $29 million if TRX rebounds above $0.31.
However, other signals suggest that TRX demand is also strengthening. Tron Inc. (NASDAQ: TRON) recently purchased an additional 173,051 TRX tokens at an average price of $0.29. The company’s total TRX reserves have now surpassed 679.2 million TRX.
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The number of weekly active addresses on Tron has also been rising steadily for years. It currently stands at 24.68 million. This indicates that TRX demand remains supported even during a broader market decline.
Short sellers may capture short-term profits while negative sentiment dominates. Without a clear profit-taking plan, however, those gains could quickly disappear.
Each of these altcoins has its own narrative. Yet as market volatility continues to expand, liquidation risks rise sharply for both Long and Short traders.
“Total crypto liquidations officially exceed $5 billion over the last 4 days, marking the largest wave of liquidations since October 10th.” — The Kobeissi Letter reported.
As liquidation losses grow, retail investors may run out of capital to sustain buying pressure. This could push the market into a prolonged stagnant phase.
