3 Altcoins face significant liquidation risks in the first week of February

The cryptocurrency market kicks off the first week of February amid an increasingly intense tug-of-war between bulls and bears. Although bears still hold the advantage, bulls seem to be beginning to see opportunities as prices approach sensitive zones. This has made volatility more unpredictable, while the scale of losses from liquidations is rising on both Long and Short sides.

Why should you closely monitor altcoins like Solana (SOL), Hyperliquid (HYPE), and Tron (TRX)? Here are the highlights.

Solana (SOL)

At the start of February, SOL’s price briefly fell below $100 amid widespread negative pressure across the market.

According to the 7-day liquidation heatmap, potential Short liquidation clusters are dominating. Short-term leveraged traders appear to be leaning toward the scenario of continued deep declines for SOL.

SOL Liquidation Map | Source: CoinglassHowever, the $100 zone remains one of the most important support levels for SOL over the past two years. Increasing short positions (with high leverage) right at a strong support area often carries significant risk of a “reversal” bounce.

Recent analyses from Coinphoton also noted a sharp increase in new Solana addresses in January, at times exceeding 10 million addresses created daily.

Additionally, some catalysts could support a recovery, including: growth in user numbers from meme coin launchpads, the expansion of USD1 stablecoin, and Solana’s participation in the trend of enhanced privacy through GhostSwap.

Currently, selling pressure driven by overall negative sentiment is directly confronting Solana’s own upward momentum around the $100 mark. This confrontation could trigger strong volatility spikes in the form of “wicks,” risking liquidation for both Long and Short positions.

According to CoinGlass, if SOL recovers above $113 this week, Short liquidations could reach up to $500 million. Conversely, if SOL continues to slide toward $86, Long positions could face over $142 million in liquidations.

Hyperliquid (HYPE)

Hyperliquid (HYPE) is one of the few altcoins that has maintained a roughly 50% increase since the January 21 bottom, while most other altcoins continue to set new lows.

HYPE Liquidation Map | Source: CoinglassHYPE’s liquidation map shows a relatively balanced state between Long and Short. At the current price around $31:

HYPE’s upward movement against the overall trend is already a risky signal. Some reports from Coinphoton also mention significant capital outflows, while market liquidity remains insufficient to sustain a stable recovery.

Nevertheless, HYPE has its own drivers: notably, a 90% reduction in monthly token allocations to the team, along with trading demand for metal pairs on the Hyperliquid platform supporting its price.

In recent sessions, buying and selling forces have continuously offset each other. HYPE has formed a “spinning top” candlestick pattern for four consecutive days—often a sign that the market is accumulating energy for a major move, which also increases liquidation risk.

Tron (TRX)

Recently, a woman named Ten Ten (Zeng Ying), who claims to be Justin Sun’s ex-girlfriend, accused him of market manipulation of TRON (TRX) during its early days. According to her allegations, Sun allegedly directed employees to open multiple Binance accounts under personal names to coordinate trading activities.

This information could amplify negative sentiment within the TRX holder community, especially since the market is sensitive to bad news and prone to panic selling in a chain reaction.

From a trading perspective, short-term traders are leaning toward further downside. The liquidation heatmap shows potential Short liquidation clusters dominating; this figure could reach nearly $29 million if TRX rebounds above $0.31.

TRX Liquidation Map | Source: CoinglassHowever, some signals indicate that TRX’s demand is still being supported. Tron Inc. (NASDAQ: TRON) recently bought an additional 173,051 TRX at an average price of $0.29, increasing its total reserve to over 679.2 million TRX.

Moreover, the number of active addresses on Tron has steadily increased over several years and now stands at 24.68 million. This suggests that TRX’s usage demand remains resilient even in a weakening overall market.

In the short term, short sellers might exploit negative sentiment to take profits. However, without a clear profit-taking plan, gains could quickly “vaporize” if the price reverses.

Conclusion

The three altcoins above each have their own “stories,” but the common point is that they are in high-volatility zones—where liquidation risks for both Long and Short are significantly elevated.

The Kobeissi Letter states: “Total liquidations across the crypto market have officially exceeded $5 billion in the past 4 days, marking the largest liquidation wave since October 10.”

As liquidation losses grow, retail investors may gradually run out of resources to sustain buying pressure. If this continues, the market could enter a sideways phase with reduced liquidity for a relatively long period.