The fourth week of July marked a historic milestone, with the total market capitalization of cryptocurrencies surpassing $4 trillion for the first time. At the same time, the market capitalization of altcoins is also approaching historical highs (ATH), creating a wave of optimism across the market.
However, amidst this excitement, if prices experience sharp fluctuations, many altcoins (especially those favored by highly leveraged short-term traders) will face the risk of large-scale liquidations.
XRP
According to Coinglass data, July was an important milestone for XRP, with OI (total value of open positions in the derivatives market) reaching a historic high of $10.9 billion. This shows that speculative funds are flowing into XRP in a generally optimistic market atmosphere.
A noteworthy factor is that the financing rate for XRP has turned positive and reached its highest level since the beginning of the year. A positive rate means that futures prices are above spot prices—reflecting strong optimism, as most traders are betting on an upward trend.
However, it is the imbalance between long and short positions that puts XRP in danger. The 7-day liquidation chart shows that the cumulative liquidation value of long positions far exceeds that of short positions. If XRP suddenly drops to $3 this week, the total value of liquidated long positions could reach nearly $1 billion—this is a concerning figure.
This concern is not unfounded. The number of new investors in XRP is declining—this is often a precursor to a short-term pullback.
However, there are also some bright spots. A recent report from Kaiko shows that XRP's 1% market depth (a key indicator of liquidity) has reached a new high for the year, with spot market trading volume approaching $10 million. This places XRP ahead of major altcoins such as SOL, BNB, and ADA, second only to Ethereum in terms of effective order matching.
In short, XRP is in a 'predicament': strong demand, ample liquidity, but the risk of large-scale liquidation always lurks if the market reverses. In the current highly volatile environment, derivatives traders need to be cautious in choosing leverage and risk management strategies.
DOGE
In July, Dogecoin (DOGE) experienced a strong surge, attracting significant attention from numerous investors. The news that blockchain company Bit Origin plans to raise up to $500 million to establish a Dogecoin investment fund also provided important impetus for the rise in Dogecoin. This further confirms the belief that the 'meme coin season' will return with the revival of altcoins.
According to Coinglass data, the financing rate for Dogecoin reached its highest point of the year on July 21, coinciding with a price rebound to $0.28. This indicates that most short-term traders are betting on an upward trend and opening long positions, anticipating that Dogecoin will continue to rise.
However, using high leverage also increases liquidation risk. A typical example is prominent trader James Wynn on the Hyperliquid platform, who recently had to liquidate part of his position worth 4.45 million DOGE (equivalent to $1.15 million) after closing long orders.
DOGE has currently seen a slight pullback, falling from a high of $0.28 to around $0.266. The 7-day liquidation map shows that if the price continues to drop to $0.236, the total value of liquidated long positions could reach $300 million—this figure is enough to shock the derivatives market.
Additionally, long-term DOGE holders are quietly withdrawing funds, which may indicate that profit-taking sentiment is beginning to form behind the scenes.
In a prosperous yet fragile market, Dogecoin presents both breakthrough opportunities and the risk of deep pullbacks. Leveraged traders should be particularly vigilant about sudden price fluctuations and closely monitor key technical levels in the coming week.
ADA
July was a breakthrough month for Cardano (ADA), with open positions reaching a new high of $1.74 billion, marking the fifth consecutive week of growth. This steady upward momentum leads the market to believe that breaking the $1 barrier is just a matter of time.
On-chain indicators such as Coin Days Destroyed (CDD) and MVRV ratios reinforce the bullish argument, indicating that many investors are still holding and expecting valuations to be higher in the short term.
However, Coinglass data shows that the derivatives market is entering a 'pressure zone.' The 7-day liquidation chart indicates that if ADA reaches $1, the total value of liquidated short positions could reach $58 million—this squeeze could lead to a price surge in the short term.
Conversely, if the price falls to $0.78, long orders will face liquidation risks of up to $120 million, indicating that the current market's long and short positions are clearly unbalanced.
Another potential factor affecting investor sentiment is that Cardano co-founder Charles Hoskinson is preparing to release an important audit report. While the specifics of the report are unclear, if there are controversies, such documents could provoke strong reactions.
Tensions in the derivatives market continue to escalate. As of the time of writing, the total value of open contracts in the market has exceeded $213 billion, reflecting extremely high levels of speculation. In just the past 24 hours, over 152,000 traders have been liquidated, totaling $553.68 million, of which more than $370 million came from long positions—this is a signal worth noting.
In summary, while ADA demonstrates impressive technical strength, the current market is highly volatile. As the market enters overbought territory, market sentiment becomes increasingly complex, and investors (especially leveraged traders) should be wary of sudden reversals.
Today's fear index is 74, indicating a state of greed.
Market sentiment remains in the optimistic range, or is ready to welcome the next round of increases. Spot trading volume remains high, showing active market participation, with demand still enthusiastic and not significantly retreating due to price declines. The volume of open contracts has surged to high levels, and funding rates have also risen simultaneously, with sellers gradually exhausting their strength.
Key cryptocurrencies to watch: XRP, SOL, ADA, SUI, LINK, AVAX, LTC, DOT (all of which are hopeful candidates for ETFs, and institutions and companies have begun to shift reserves to these coins), additionally Ethereum is approaching $4000, SOL is stabilizing at $200, DEFI, public chains, Ethereum-based and SOL-based assets, look for opportunities to position during the pullback.
