Lunar New Year Liquidity Dries Up... Warning of a ‘Cascade Liquidation Tsunami’ for XRP, Dogecoin, and Bittensor

▲ XRP, Dogecoin (DOGE), and Bittensor (TAO) / ChatGPT-generated image

As the cryptocurrency market enters the third week of February with heightened volatility, XRP, Dogecoin (DOGE), and Bittensor (TAO) are facing a critical juncture marked by the risk of large-scale liquidations.

According to crypto-focused outlet BeInCrypto on February 16 (local time), XRP is facing increasing downside risks amid strong selling pressure on the Korean exchange Upbit. On-chain data analytics firm Arkham reported that approximately 50 million XRP in net selling occurred on Upbit over the past 15 hours. Liquidation map data shows that if XRP falls to $1.30, more than $200 million in long positions could be liquidated. Conversely, if the price breaks above $1.63, short positions worth around $150 million are expected to be liquidated.

Dogecoin is also experiencing heightened volatility, threatening both long and short position investors. Technical analyst Mikybull Crypto identified a bull flag pattern on the Dogecoin chart, suggesting the possibility of a rebound, but significant liquidation risks remain. If the price drops to $0.091, long positions totaling $90 million could be wiped out. On the other hand, if DOGE regains the $0.109 level, approximately $98 million in short positions could be liquidated, potentially providing upward momentum.

Bittensor, recently listed on South Korea’s largest exchange Upbit, has surged more than 7%, outperforming the broader market and increasing the likelihood of a short squeeze. Crypto expert Michaël van de Poppe emphasized that protocols combining artificial intelligence and cryptocurrency are essential components of investment portfolios, speaking positively about Bittensor’s value. The influx of liquidity and expanded investor access following the Upbit listing are placing considerable pressure on existing short position holders.

Reduced liquidity during the Lunar New Year holiday season in Asia is cited as a factor that could further amplify liquidation risks. With lower market trading volumes, even relatively small sell-offs can trigger sharp price swings and cascading forced liquidations. Major altcoins, including XRP, are locked in a tight battle between key technical support and resistance levels, leaving investors on heightened alert.

Crypto market experts predict that the direction of liquidations this week will depend on Bitcoin’s movement and macroeconomic indicators. Massive liquidation events could escalate into a broader liquidity crisis across the market, underscoring the need for close monitoring of real-time price fluctuations and conservative capital management. Investors are advised to exercise caution when using leverage and to prepare for unexpected price movements.

Disclaimer: This article is for informational purposes only and the publisher is not responsible for any investment losses incurred based on its contents. The information provided should not be construed as financial advice.