HYPE long positions could lose $111 million if price drops to $42, as ATH breakout hype raises risk of profit-taking pressure.
As the second week of September begins, the altcoin market cap has yet to show a decisive breakout move. TOTAL3 (excluding Bitcoin and Ethereum) remains around $1 trillion.
However, the liquidation map reflects bullish expectations from short-term derivatives traders. They appear to be betting heavily on an upward scenario in the second week of September. If they are wrong, the scale of liquidations could be severe. Below are several altcoins facing that risk.
The 7-day liquidation map of XRP shows a clear imbalance between cumulative long and short liquidations. If XRP declines this week, long-position holders will take heavier losses.
Several factors have encouraged traders to bet money and leverage on a bullish scenario. For example, Wetour, Air China’s loyalty partner, recently revealed plans to enable XRP payments.
In addition, XRP recorded an 8% rebound in September. Although modest, it was enough for the price to confirm a breakout from the descending trendline. This technical signal fueled expectations for continued short-term gains.
However, a recent BeInCrypto report highlighted three red flags for XRP in September that could derail its rally. These include record-high XRP reserves on Binance, weakening XRPL ecosystem activity, and a sharp drop in Google Trends interest for XRP.
If XRP moves against bullish short-term expectations, long traders could face up to $467 million in liquidations if the price falls below $2.6. On the other hand, if XRP rises to $3.2, short traders could suffer $148 million in liquidations.
Like XRP, Dogecoin’s liquidation map shows a significant imbalance, reflecting short-term traders’ bullish bets.
Since long traders committed large amounts of capital and leverage on a DOGE rally this week, they would suffer greater losses if the price drops.
If DOGE falls to $0.20, cumulative long liquidations could reach $354 million. In contrast, if DOGE climbs to $2.55, cumulative short liquidations would only total $80 million.
The optimism driving long traders may stem from the potential launch of the first DOGE ETF in September. They expect this news to push the token higher this week. On-chain data also supports the bullish case, showing early signs of new inflows from retail investors, although still weak.
However, major macroeconomic events this week could trigger unexpected moves across altcoin markets, putting long traders at risk. For example, the Producer Price Index (PPI) will be released on September 10, followed by the Consumer Price Index (CPI) on September 11. These announcements often spark sudden volatility in Bitcoin and altcoins in the short term.
In September, Hyperliquid’s plan to launch its native stablecoin, USDH, attracted proposals from Paxos and Frax Finance.
These developments prompted traders to back a bullish scenario. But if they are wrong, and HYPE falls to $42, long traders could face more than $111 million in liquidations. Conversely, if the token climbs to $56, short traders’ liquidations would total only $19 million.
The market does not always move against long traders’ expectations, and they might win this round. However, profit-taking pressure often follows when a crypto asset breaks its previous high and sets a new ATH.
If gains are not secured, HYPE long traders could face losses in the event of a sharp dump after the ATH.
