Market Jitters: Three Altcoins on Liquidation Watch as February Trading Kicks Off

February opens with a tense standoff in the cryptocurrency markets. While bears maintain their grip, bullish traders are searching for entry points amid the turbulence. This clash is amplifying price swings, creating a perilous environment where leveraged positions—both long and short—face mounting risks of being wiped out.

Analysts are flagging three specific altcoins—Solana (SOL), Hyperliquid (HYPE), and Tron (TRX)—as potential flashpoints for cascading liquidations in the coming days. Here’s a closer look at the fragile dynamics at play.

Solana (SOL): Battling at a Critical Juncture

Solana briefly dipped below the psychologically significant $100 mark early this month, succumbing to broad market pressure. Liquidation heatmaps indicate a heavy concentration of leveraged short bets betting on a deeper collapse.

However, the $100 zone represents a major support level tested over the past two years. "Shorting at such a historically strong floor is a high-stakes game," notes market strategist Liam Chen. "The leverage piled up here means any rebound could be violently accelerated by short covering."

Fundamentals complicate the picture. Solana saw explosive network growth in January, with daily new addresses surpassing 10 million. Catalysts like meme coin launchpad activity, the expansion of its stablecoin ecosystem, and new privacy features could fuel a recovery. The collision of these bullish fundamentals with pervasive negative sentiment sets the stage for volatile "wick" movements, threatening both long and short positions.

Data from CoinGlass suggests a rebound above $113 could trigger over $500 million in short liquidations, while a breakdown toward $86 might liquidate more than $142 million in long bets.

Hyperliquid (HYPE): Defying the Trend at a Cost

Hyperliquid has been an outlier, rallying 50% from its January low while peers floundered. Its liquidation map shows a precarious balance, with roughly $80 million each at risk for longs near $26 and shorts near $35.5.

"HYPE’s resilience is impressive but also a red flag," says crypto trader Anya Petrova, known for her sharp commentary. "It’s moving against the tide with reported capital outflows and thin liquidity. This isn’t strength; it’s a trap waiting to spring. The consecutive spinning top candlesticks are a classic warning sign of an impending violent move."

While positive developments like a 90% cut in monthly team token allocations and demand for its metal trading pairs provide support, the token appears caught in a tug-of-war. The stalemate increases the probability of a sharp, liquidation-fueled breakout in either direction.

Tron (TRX): Scandals and Steady Demand Collide

Tron faces unique headwinds. Allegations of early-market manipulation, leveled by an individual claiming to be founder Justin Sun's former girlfriend, have introduced fresh uncertainty. This could exacerbate selling pressure during a panic.

Short-term traders are positioned for further downside, with nearly $29 million in short liquidations possible if TRX reclaims $0.31. Yet, underlying demand appears robust. Tron Inc. continues accumulating TRX, boosting its reserves to over 679 million tokens. Network activity remains strong, with weekly active addresses holding steady near 24.7 million.

"The data tells two stories," observes veteran investor Marcus Reed. "Negative sentiment might offer shorts quick profits, but the steady institutional buying and relentless user growth suggest a strong foundational value. Shorts without an exit plan could get squeezed if sentiment shifts even slightly."

The Bigger Picture

Each coin has its own narrative, but they share a common thread: escalating liquidation risk in a skittish market. As losses mount, the capital available to retail investors—often the fuel for sustained rallies—may diminish, potentially leading the market into a prolonged period of stagnation.

— Analysis based on reporting by Nhat Hoang at BeInCrypto.