After three consecutive weeks of steep declines, buying pressure is gradually returning to the crypto market. However, this recovery has not been strong enough to fully restore investor confidence. As a result, skepticism remains high, especially among derivatives traders. Several altcoins are now showing asset-specific catalysts that could trigger sharp price rebounds this week, potentially leading to significant short liquidations. Ethereum (ETH), Dogecoin (DOGE), and Zcash (ZEC) alone could account for more than $3.1 billion in liquidations if traders misjudge the risks.
Ethereum has already dropped roughly 40% since mid-January, and liquidation data shows that short positions currently dominate. Many traders are positioning for further downside, but on-chain indicators suggest growing vulnerability for bears. Exchange reserves have fallen to around 16 million ETH, the lowest level since 2024, as recent sell-offs accelerated outflows. Lower exchange balances reduce available supply, which can amplify price rebounds during periods of renewed demand. In addition, more than 4 million ETH remain locked in the staking queue, further constraining liquid supply. If ETH strengthens and moves toward the $2,370 level this week, short liquidations could approach $3 billion.
Dogecoin has also seen heavy losses, falling below $0.10 and revisiting its 2024 lows. Despite the bearish sentiment, liquidation data shows nearly $98 million in potential short liquidations if DOGE rebounds toward $0.109. Technical analysts point to bullish structures, including a bull flag pattern in the short term and a broader higher-high, higher-low trend in the long term. Renewed social engagement around Dogecoin, including recent interactions involving Elon Musk, could further fuel speculative interest.
Zcash has declined about 50% since early January, following uncertainty around its core development team and broader market weakness. Despite this, short positions dominate liquidation maps, creating upside risk. Positive sentiment has emerged after Ethereum founder Vitalik Buterin donated to Zcash-related development, reinforcing the importance of blockchain privacy. Meanwhile, over 5 million ZEC remain locked in shielded pools, signaling sustained confidence in the protocol.
As the broader crypto market shows signs of stabilization and a potential recovery toward a $2.8 trillion total market cap, these asset-specific catalysts could push prices beyond bearish expectations, increasing liquidation risks across major altcoins.
