Altcoin liquidation storm! XRP, AXS, DUSK may face $600 million bloodbath this week

In the third week of January, the market liquidated nearly $900 million, with Trump tariffs triggering volatility. XRP, AXS, and DUSK become the most dangerous altcoins. XRP rebounded to $2.29, risking liquidation of $600 million shorts, with whales buying at lows. AXS surged over 120%, but exchange deposits hit a three-year high. DUSK soared sixfold before falling below $0.13, risking liquidation of over $12 million longs.

XRP Short Positions Face $600 Million Liquidation Risk

(Source: Coinglass)

On January 19, XRP dropped to $1.85, then rebounded to $1.95. This decline wiped out most of the early-year rebound. Short-term traders’ pessimism appears to be intensifying, with many betting on further declines. The 7-day liquidation chart shows potential short liquidations exceeding long positions.

Data indicates that if XRP rebounds to $2.29 this week, shorts could face over $600 million in liquidations. This scenario could occur if market fears over Trump’s new tariffs quickly subside. Strong buy orders around $1.8 will also support a rebound. Such a massive short liquidation in a single asset is rare, highlighting extremely crowded short positions on XRP.

(Source: CryptoQuant)

Another key indicator is XRP’s spot order book size. CryptoQuant data shows whales frequently place orders when XRP trades below $2.4. This pattern reflects strong demand from whales at lower price levels. “Whale interest has reached its highest level since 2026. Large orders dominate trading records, indicating ‘smart money’ is positioning ahead of the next rally,” said a CryptoQuant analyst.

If whale buying exceeds market panic, XRP could rebound rapidly. This would force shorts to liquidate. Technically, $1.85 is a recent low and an important psychological support. Holding this level along with whale buy orders makes a rebound to $2.29 entirely feasible. At that point, $600 million in short liquidations could trigger a short squeeze, further pushing prices higher.

XRP Liquidation Risk Analysis

Current Price: $1.95 (rebounded from $1.85 low)

Short Liquidation Trigger Price: $2.29

Potential Short Liquidation Scale: Over $600 million

Whale Support Price Range: Frequent buying between $1.8 and $2.4

Risk Assessment: Overcrowded short positions, high rebound risk

For short traders, this is an extremely dangerous setup. When short liquidations far exceed longs, any rebound can trigger a chain reaction of liquidations. Short liquidations force buy-ins, pushing prices up and causing more short liquidations, creating a vicious cycle. A liquidation scale of $600 million can push prices up by 10% or more in a short period.

AXS Up 120% Year-to-Date but Exchange Deposits Surge Warning

(Source: Coinglass)

Axie Infinity (AXS) unexpectedly re-entered the hot list in the third week of January. The token has gained over 120% so far this year. The rally was driven by plans from Axie’s founders to convert rewards into a new utility token called bAXS. This change is part of a broader tokenomics reform scheduled for 2026.

The 7-day liquidation chart for AXS shows a potential liquidation scale of about $12 million. However, the liquidation price range for longs is narrower than for shorts, indicating many traders still expect further short-term upside. These bullish traders may be overly optimistic, ignoring potential risk signals.

Meanwhile, data shows that AXS’s January price increase coincided with a significant growth in exchange deposits. The average deposit volume over the past 7 days reached a three-year high. This trend suggests many investors are seeking to exit during the price rebound, which could lead to selling pressure at any moment. This poses a risk to long positions.

The surge in exchange deposits is a classic bearish signal. In crypto markets, users typically hold tokens in personal wallets. Moving tokens to exchanges often indicates an intent to sell. The record-high exchange deposits for AXS suggest many holders are preparing to cash out, posing a potential threat to the price.

Fundamentally, the tokenomics reform is positive news, but the market may have already priced in the 120% rally. Once the good news is fully digested, lack of new catalysts could lead to profit-taking. Coupled with the surge in exchange deposits, the risk for AXS’s longs is increasing.

DUSK Sixfold Surge Leads to Long Liquidations

(Source: Coinglass)

Amid rising attention to privacy coins, Dusk has become a rising star. This rally reflects capital shifting from larger market cap privacy coins to smaller ones. Although DUSK’s price has nearly sixfolded since the start of the year, recent days have seen significant short liquidations. Short-term traders continue to add funds and leverage, betting on long positions.

DUSK’s liquidation map shows dominant potential long liquidations. If prices pull back this week, longs will face serious risk. BeInCrypto recently reported that DUSK inflows into exchanges are increasing, indicating potential profit-taking pressure. Additionally, fears over Trump’s new tariffs on Europe have driven DUSK higher. These factors threaten the sustainability of the rally.

In October last year, capital shifted from ZEC to lower-market-cap privacy coins, and DASH’s price surged sixfold. But within a week, DASH fell 60%. DUSK faces similar risks. If FOMO emotions fade, and the price drops below $0.13, total long liquidations could reach $12 million.

DASH’s experience offers a warning. A sixfold surge followed by a 60% drop in a week shows high volatility in small-cap altcoins. When FOMO drives prices away from fundamentals, any negative news can trigger a stampede of sell-offs. DUSK’s current technicals and capital flows are very similar to DASH’s at that time, suggesting history may repeat.

These three altcoins reflect sharply contrasting and even opposing trader expectations. XRP’s crowded shorts, AXS and DUSK’s crowded longs—this complexity stems from geopolitical pressures and internal market dynamics conflicts. Without strict stop-loss strategies, both longs and shorts could suffer liquidation losses.