The altcoin market enters the third week of August with a predominant red color. Total market capitalization (TOTAL3) decreased by 7%, from over $1.1 trillion to $1.03 trillion. This correction has fueled the short-selling sentiment among derivative traders.
The question arises: how significant is the liquidation risk? The liquidation map shows that many altcoins are facing high pressure.
1. Solana (SOL)
In the third week of August, the volume of Short liquidations (green on the right) dominated over Long. However, the Short side may face risks as Solana is receiving many positive signals.
Specifically, the network is considering governance proposal SIMD-0326 to introduce the Alpenglow consensus protocol, which helps shorten block completion time.
At the same time, this altcoin has just set a new record as the network has processed more than 104,000 transactions per second.
If the price of SOL recovers above $200 this week, over $1.1 billion in Short positions will be liquidated. Conversely, if the price drops to $161, about $646 million in Long positions will be "blown away."
Analysts warn of a more concerning scenario. They predict that SOL could drop below $170 before bouncing back above $200 within the week. This means that both Long and Short sides could face liquidation risks.
2. Dogecoin (DOGE)
DOGE has become the center of attention in August as whales and investors continuously accumulate.
Notably, Grayscale has filed with the U.S. Securities and Exchange Commission (SEC) to convert the $2.5 million Dogecoin Trust into a spot ETF.
At the same time, on Polymarket, investors are betting more than 70% on the likelihood that the SEC will approve the DOGE ETF before the end of this year.
Despite this optimistic news, the liquidation map shows that Short positions still dominate, reflecting traders' expectations of a correction. Since the beginning of the month, DOGE has increased over 30%, from $0.188 to $0.255.
If DOGE falls below $0.20, the total number of Long liquidations could exceed $176 million. Conversely, if this memecoin bounces back to $0.26, about $290 million in Short positions will be wiped out.
Trader Tardigrade believes that this is not the time to be pessimistic about DOGE, forecasting that the price could aim for $1.8 in the medium term thanks to an ascending triangle pattern.
"Dogecoin's ascending triangle pattern targets a medium-term level of $1.8," Tardigrade stated.
3. Chainlink (LINK)
Chainlink is also attracting attention in August thanks to the Chainlink Reserve initiative. Recent reports show that whale wallets have added over 1.1 million LINK in just 7 days.
However, LINK reserves on exchanges are increasing, indicating that many investors have begun to take profits after this altcoin surged more than 50% since the beginning of the month.
The liquidation map of LINK looks relatively balanced as both bulls and bears have strong momentum.
If LINK drops below $22, about $85 million in Long positions could be liquidated.
On the contrary, if the price rises to $27, about $85 million in Short positions will be swept away.
Meanwhile, market sentiment remains quite greedy at the moment, with the altcoin season index standing at 51 points.
