3 altcoins could trigger a major liquidation in the third week of January

As we enter the third week of January, the total liquidation value across the entire cryptocurrency market has reached nearly $900 million. The main cause is negative volatility driven by the impact of President Trump’s new tariff policies on the European Union, causing the market to enter a state of instability. It is forecasted that this figure could continue to rise as many altcoins are signaling clear risk warnings.

This week, XRP, Axie Infinity (AXS), and Dusk (DUSK) are three prominent names attracting capital flow and leverage for different reasons. However, if investors lack strict risk management strategies, these coins could become dangerous “traps.”

XRP: Whales accumulate, shorts face major risks

On January 19, XRP sharply dropped to $1.85 before recovering to $1.98, erasing most of the recovery gains since the beginning of the year. Pessimistic sentiment has increased significantly among short-term traders, with many predicting further declines. The 7-day liquidation map shows that the risk of short positions being liquidated exceeds that of longs.

XRP Liquidation Map | Source: CoinglassMarket data indicates that if XRP can recover to $2.29 this week, short positions could be liquidated with a total value of over $600 million. This scenario becomes plausible if concerns over Trump’s new tariffs quickly subside, coupled with strong demand around the $1.8 support level, aiding the recovery.

Another important indicator is the average transaction size of XRP. According to CryptoQuant, when the price is below $2.4, large orders from whales appear frequently, reflecting strong accumulation demand at low price levels.

Average order volume on XRP spot trading | Source: CryptoQuant. “Whale interest is at its highest since 2026. Large orders dominate the trading board, indicating that ‘Smart Money’ is leading the next rally,” said a CryptoQuant expert.

If whale buying pressure surpasses the market’s temporary fears, XRP could rebound strongly, forcing short positions to face significant liquidation.

Axie Infinity (AXS): Impressive rally but increasing profit-taking pressure

Axie Infinity (AXS) unexpectedly stood out again in the third week of January, with a gain of over 120% since the start of the year. The main driver is the plan to convert rewards into a new utility token called bAXS, part of the tokenomics overhaul scheduled for 2026.

The 7-day liquidation map for AXS shows potential liquidation volume around $12 million, with the liquidation zone for long positions narrower than for shorts, indicating that many traders still expect a short-term upward trend.

AXS Liquidation Map | Source: CoinglassHowever, data also shows that the amount of deposits into exchanges for AXS in the past 7 days has reached the highest level in three years.

AXS inflow into exchanges | Source: CryptoQuant. This reflects strong profit-taking sentiment during the price rebound, creating potential selling pressure that could appear at any time, threatening long positions.

Dusk (DUSK): Growth potential accompanied by deep correction risks

Dusk has emerged as a new bright spot amid the wave of interest in privacy coins. DUSK’s price rally reflects capital shifting from large-cap privacy coins to smaller options.

Although it has increased nearly sixfold since the beginning of the year, DUSK has triggered a series of short liquidation orders in recent four days, as short-term traders continue to increase capital and leverage into long positions.

DUSK Liquidation Map | Source: CoinglassThe liquidation map shows that the risk of long position liquidations is dominant. If the price corrects this week, long positions will face significant risks. According to Coinphoton’s report, DUSK’s inflow of funds into exchanges is increasing, reflecting selling pressure from profit-taking. Additionally, DUSK’s price rise coincides with concerns over Trump’s new tariffs on Europe returning, posing a challenge to the sustainability of the rally.

This scenario previously occurred in October last year, when DASH surged six times due to capital shifting from ZEC to smaller-cap privacy coins, but then dropped by 60% within a week. DUSK faces the risk of repeating this pattern. If FOMO sentiment diminishes and the price falls below $0.13, the total value of long position liquidations could reach $12 million.

The three altcoins above represent traders’ conflicting expectations, reflecting the complexity between geopolitical pressures and intrinsic market dynamics. Without strict stop-loss strategies, both long and short positions could suffer significant losses from the liquidation wave.