The total market capitalization of cryptocurrencies has reached a record $4 trillion. Altcoins are also striving to recover their historical highs. However, some tokens appear vulnerable.

Some altcoins popular among short-term traders use significant leverage. Because of this, they may face substantial liquidations.

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1. Analysis of altcoin XRP $XRP

According to C*******s, open interest for XRP reached an all-time high of $10.9 billion in July.

The metric reflects the total value of open positions in the derivatives market. At the same time, the funding rate has become positive and reached its highest level since the beginning of the year. This occurs when the futures price exceeds the spot price, reflecting optimism in the market.

Most traders expect prices to rise and are opening long positions.

As a result, the liquidation map has begun to show an imbalance between long and short positions.

According to the 7-day map, the total liquidation of long positions significantly exceeds short positions. If XRP falls to $3 this week, long position liquidations could reach nearly $1 billion.

However, the latest K***o report shows that 1% of XRP's market depth reached a new annual high — nearly $10 million on the spot market. This places it above SOL, BNB, and ADA, second only to ETH.

The increase in market depth and liquidity indicates that XRP may quickly recover if the price falls.

However, sharp price fluctuations can create significant risks for derivatives traders with both long and short positions.

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2. DOGE $DOGE

In July, DOGE generated significant interest among investors, especially against the backdrop of Bit Origin's plans to raise $500 million to create a Dogecoin treasury. Additionally, some indicators suggest a possible return of the meme coin season alongside the current altcoin season.

Data from C*******s shows that on July 21, the funding rate for DOGE hit an annual high. At that time, the price returned to $0.28, and many short-term traders opened long positions, expecting further growth for DOGE.

The risk of long position liquidation is increasing as more traders are using leverage to bet on the rise of altcoins.

Recently, L*********n reported that the well-known trader Hyperliquid James Wynn liquidated part of his position, selling 4.45 million DOGE for $1.15 million after closing a long trade.

At the time of writing, DOGE has fallen from the July high of $0.28 to $0.266.

The liquidation map for the past 7 days shows that if DOGE falls to $0.236 this week, the total amount of long position liquidations could reach $300 million.

Meanwhile, some on-chain metrics indicate that long-term DOGE holders are quietly withdrawing funds. This may indicate profit-taking.

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3. ADA $ADA

Cardano (ADA) updated its historical maximum in open interest in July, reaching $1.74 billion. This occurs against the backdrop of the fifth consecutive week of price growth.

Many analysts believe that ADA may soon reach $1. On-chain metrics, such as Age Consumed and MVRV Ratio, suggest further price growth.

According to the 7-day liquidation map, if ADA reaches $1, short positions amounting to up to $58 million may be liquidated.

However, the downside risks are even greater. If ADA falls to $0.78 this week, long position liquidations could amount to $120 million.

There are some reasons for concern that could negatively impact ADA's price. News has emerged that Cardano co-founder Charles Hoskinson is preparing to publish an audit report, which may affect trader sentiment.

At the time of writing, the total open interest in the market continues to grow, exceeding $213 billion. The cryptocurrency derivatives market has never been this active.

$370 million of this amount is attributed to long positions. This raises concerns that the trend may continue into the fourth week of July.