After a wave of panic selling, the market has rebounded, but a potential storm triggered by short squeezes is quietly brewing in the altcoin sector.
Since mid-January, the cryptocurrency market has been under sustained pressure, with Bitcoin price volatility sparking widespread liquidations. However, after three consecutive weeks of decline, cautious buying pressure is beginning to return.
A subtle shift in market sentiment, combined with unique catalysts for certain altcoins, could drive a much larger-than-expected price rebound this week. According to the latest Gate market data analysis, three major altcoins—Ethereum (ETH), Dogecoin (DOGE), and Zcash (ZEC)—could collectively trigger over $3.1 billion in leveraged position liquidations if prices move in specific directions.
Market Overview: From Panic Selling to Accumulating Short Risk
The first week of February saw intense deleveraging across the crypto market. Around February 4, Bitcoin dropped below the $70,000 mark, dragging major altcoins down by 6% to 10%. Total market liquidations briefly exceeded $775 million.
After the panic sell-off, a technical rebound began to emerge. Yet, several fund managers noted the speed of the market collapse was startling. "I think almost no one truly expected panic selling of this magnitude to happen so quickly," said Zaheer Ebtikar, founder and CIO of Split Capital.
This rapid decline triggered a chain reaction of liquidations, and the current market structure has actually set the stage for a reversal. Analysts observed that since December 2024, the non-Bitcoin token market has essentially been in a "rolling bear market."
Liquidation Risk Landscape for Three Altcoins
To better understand this week’s risk focal points, the table below compares key data for the three altcoins facing significant liquidation risk:
| Token Name | Current Price (approx.) | Key Liquidation Trigger Price | Potential Liquidation Scale | Main Risk Direction | Core Catalyst |
|---|---|---|---|---|---|
| Ethereum (ETH) | $2,106.1 | Up to $2,370 | ~$3 billion | Short positions | Exchange reserves at historic lows |
| Dogecoin (DOGE) | $0.09599 | Up to $0.109 | ~$98 million | Short positions | Bull flag technical pattern |
| Zcash (ZEC) | $238.91 | (Rebound upward) | Significant short liquidation pressure | Short positions | Vitalik Buterin’s public donation support |
ETH: Whale Liquidations and Exchange Reserve Depletion
Ethereum currently carries the highest concentration of short risk in the market. According to Coinglass data, if the Ethereum price rebounds to $2,370, up to $3 billion in short positions could be liquidated.
Ethereum exchange liquidation map. Source: Coinglass
This massive risk stems from two main factors. First, there’s a macro-level supply squeeze. On-chain data shows Ethereum reserves on exchanges have dropped to about 16 million coins, the lowest level since the start of 2024. Second, specific whale liquidation pressures are mounting. Entities like Trend Research hold large leveraged ETH positions, with average liquidation prices clustered around $1,640.
Ethereum exchange reserves. Source: CryptoQuant
Gate market data shows Ethereum once dipped to $1,950, about $300 from the liquidation threshold. If prices fall into this range, concentrated forced liquidations could occur.
DOGE: Technical Patterns and Celebrity Influence in Play
Dogecoin’s price has dropped below the psychological $0.10 mark, matching its lowest point in 2024. However, its 7-day liquidation map indicates that a rebound to $0.109 could trigger about $98 million in short liquidations.
Dogecoin exchange liquidation map. Source: Coinglass
Technical analysis supports the possibility of a rebound. Trader Tardigrade pointed out that Dogecoin may be forming a bull flag—a bullish continuation pattern. If confirmed, the price could move toward $0.12.
In the long term, Gate analysts note Dogecoin has established a structure of higher lows following higher highs, which is typically seen as a sign of market strength. If this structure holds, Dogecoin theoretically has potential for gains exceeding 640%.
Zcash: Technical Faith Amid Team Upheaval
Among all altcoins, Zcash has suffered one of the steepest declines recently. Since January 8, its price has fallen about 50%. The privacy coin sector dropped over 25% in the past seven days, making it the worst-performing segment. The core development team, Electric Coin Company, announced a complete departure, intensifying sell-offs. Nonetheless, some positive signals are emerging.
ZEC exchange liquidation map. Source: Coinglass
Ethereum co-founder Vitalik Buterin publicly donated to Shielded Labs, which is dedicated to Zcash development, emphasizing that "privacy is core blockchain infrastructure." Data from zkp.baby shows that despite the price crash, over 5 million ZEC remain locked in privacy pools, demonstrating steadfast technical faith among core users.
Total protected value (ZEC). Source: zkp.baby
Price Outlook and Market Insights
Based on current Gate market data and analysis, here’s a mid- to long-term price prediction summary for Ethereum and Dogecoin:
| Year | ETH Forecast Avg Price | ETH Potential Return | DOGE Forecast Avg Price | DOGE Potential Return |
|---|---|---|---|---|
| 2026 | $2,095.27 | Baseline year | $0.09599 | Baseline year |
| 2027 | $2,189.55 | +4.00% | $0.1027 | +6.00% |
| 2028 | $2,277.13 | +9.00% | $0.1078 | +12.00% |
| 2029 | $2,743.95 | +31.00% | $0.1294 | +34.00% |
| 2030 | $2,949.74 | +41.00% | $0.1578 | +64.00% |
| 2031 | $3,111.98 | +49.00% | $0.1878 | +95.00% |
Currently, the cryptocurrency Fear & Greed Index has dropped into the "Extreme Fear" zone. This sentiment often signals a potential market turning point. Ray Hindi, co-founder of L1D AG, noted that the intense deleveraging is actually a "structural clean-up," helping to clear excess and spotlight projects with real value.
ETH supply on exchanges is drying up, with only about 16 million coins available—the lowest in two years. Over 4 million ETH are queued for staking, further tightening liquidity. Dogecoin sits below the $0.10 mark, with technical charts hinting at a potential explosive rebound. More than 5 million ZEC remain quietly locked in privacy pools, showing unwavering faith among holders despite price drops.
The market is shifting from pure panic selling toward a critical point of extreme imbalance between long and short forces. Any unexpected price move—up or down—could trigger a liquidation storm across this highly leveraged landscape.
