3 Altcoins That Could Trigger a Liquidation Record in the First Week of December

Market sentiment shifted into extreme fear on December 1. Short positions are dominating the derivatives market. Several major altcoins are exhibiting severe imbalances in their liquidation maps, which could trigger a new record in liquidations.

The following analysis highlights the underlying factors that could cause the market to deviate from short-term expectations in the first week of December.

1. Ethereum (ETH)

ETH’s 7-day liquidation map shows that cumulative liquidation volume from short positions significantly outweighs that of long positions. This indicates that traders are aggressively shorting ETH.

If ETH rebounds to $3,150 this week, cumulative short liquidations could exceed $4 billion.

ETH Exchange Liquidation Map. Source: Coinglass

What risks should short sellers consider? On-chain data on ETH exchange balances may be an important signal.

CryptoQuant data shows that ETH supply on exchanges has dropped to an all-time low of 16.6 million ETH. The trend of withdrawing ETH from exchanges has accelerated over the past month, despite ETH’s price decline.

Ethereum Exchange Reserve. Source: CryptoQuant

“With ETH exchange reserves hitting record lows… I believe Ethereum will lead the next market leg up,” investor Momin predicted.

Although many analyses suggest further downside, the ongoing accumulation, reflected in falling exchange supply, could soon amplify scarcity as selling pressure weakens. This could trigger a sudden recovery in ETH.

2. Solana (SOL)

Similar to ETH, SOL shows a clear imbalance in its liquidation map. Traders have been actively shorting SOL in early December.

If SOL rebounds to $145 this week, cumulative short liquidations could surpass $1 billion.

SOL Exchange Liquidation Map. Source: Coinglass

Is there a basis for SOL to recover this week? On-chain indicators are reflecting positive signals. Nansen reported that Solana continued to lead in transaction count during the week.

If you sort chains by pure txns this week, @solana still runs the table@Base and @BNBChain close the gap, but the throughput crown hasn’t moved@Arbitrum’s surge stands out with triple digit growth pic.twitter.com/IBG1Hdobhh

— Nansen