- New data on liquidation density reveals a deep divide in the altcoin market, signaling high volatility
- One group, including AVAX and LINK, faces a massive “short squeeze” risk, which is a bullish setup
- Another group, including RUNE and DOGE, faces a significant “long squeeze” risk, a bearish setup
A growing number of crypto traders are shifting their focus from traditional price action to liquidation density, a lesser-known but powerful metric that can offer early signals of significant price shifts.
The latest data from the analytics platform TheKingfisher reveals a noteworthy imbalance between short and long liquidations across several major cryptocurrencies. These patterns could spark abrupt market movements as key price levels are tested.
Short Squeeze Watchlist: AVAX, LINK, LTC, and XLM
Four major altcoins are showing an exceptionally high risk of a “short squeeze,” a market event where a rising price forces traders who bet against the asset to close their positions, pushing the price up even faster.
- With a current price of $21.39 , AVAX is up 0.33% in the past 24 hours and 18.78% over the past week. This sharp rise and high liquidation density may force short positions to close, pushing prices even higher.
- Similarly, Chainlink (LINK) is trading at $15.94 , having gained 1.39% today and 17.90% this week. Its short liquidation risk stands at 91.3%. A wave of short covering could quickly drive momentum upward.
Related: 4 Underrated U.S. Altcoins with Strong Fundamentals to Watch in 2025
- Litecoin (LTC), priced at $95.41 , has also posted a 10.30% weekly gain. Despite a small daily dip of 0.66%, its 88.5% short liquidation density suggests more upside could follow.
- Stellar (XLM), trading at $0.4548 , saw a 2.23% dip today but has surged 80.93% over the past seven days. With 76.9% of short positions at risk, this correction may only be temporary if a squeeze unfolds.
Long Squeeze Watchlist: RUNE, AAVE, and DOGE
On the other side of the market, some popular coins face a significant risk of a “long squeeze,” where a falling price forces leveraged long traders to sell, pushing the price down even further.
- THORChain (RUNE) shows an 89% risk for longs. Its current price is $1.55 , rising 0.75% today and 16.79% over the past week. These gains may be overstretched, and a long squeeze could trigger a sharp pullback.
Related: Discounted Now, Dominant Soon? RSR, ONDO, LINK, AVAX and Other RWA Tokens Surge Ahead
- Aave (AAVE), priced at $319.18 , is up 2.48% today and 10.87% this week. With 79.4% long liquidation risk, the coin appears vulnerable if bullish momentum fades.
- Likewise, Dogecoin (DOGE), trading at $0.2003 , faces a 70.7% long liquidation risk. Despite a weekly gain of 18.82%, its 0.02% daily dip hints at a possible cooling off.
