Extreme fear returned in the last week of March, fueling increased short selling activity. However, some altcoins have unique characteristics that could put these Short positions at risk.
Those trading Solana ($ SOL), Hyperliquid ($HYPE), and Bittensor ($TAO) should pay particular attention this week.
1. Solana ($ SOL)
The 7-day liquidation data shows a large imbalance between the potential liquidation volume of Longing and Short positions. If the price recovers to the $96 region, Short positions could incur losses of up to $680 million .
Liquidation map $SOL on exchanges. Source: Coinglass
There are two main factors that could support the price of $ SOL. First, the flow of money on the exchange reversed sharply after March 17th, with net outflows reaching approximately 700,000 SOL per day , indicating that many investors are accumulating during the dip. Second, volume on Solana 's DEXs increased by 103% , reaching $138.4 billion last week, the highest level in a year.
These signals suggest that demand for $SOL may be increasing, thereby creating a liquidation risk for Short positions.
2. Hyperliquid ($HYPE)
The liquidation map of $HYPE also shows that Short positions are dominant. If the price exceeds $42 , the total liquidation value of Short positions could exceed $60 million .
Liquidation map $HYPE on exchanges. Source: Coinglass
Tensions between the US, Israel, and Iran could positively impact demand for $HYPE through the HIP-3 market, which allows trading of contracts related to oil, metals, and indices.
Data shows that the 7-day volume of HIP-3 reached approximately $14.39 billion , with open interest around $1.73 billion . Some analyses suggest that the upward momentum of $HYPE may come from the expansion of asset markets beyond crypto, rather than solely relying on market share within crypto.
This could cause $HYPE to go against the general trend and create risk for Short positions.
3. Bittensor ($TAO)
$TAO is attracting attention as altcoin investors become more selective. Data from LunarCrush shows that discussion levels for $TAO increased by 112% in 30 days , with 3.86 million interactions in just 24 hours .
This surge comes after NVIDIA's CEO mentioned Bittensor in a podcast, and Grayscale also launched its own investment fund for $TAO. Additionally, Bittensor's subnets are seeing growth in both revenue and community engagement.
Liquidation map $TAO on exchanges. Source: Coinglass
If the positive trend continues, the price $TAO could be supported. According to the liquidation map, if $TAO exceeds $307 , Short positions could be liquidated at around $27 million .
Although Short positions have merit as the market remains under pressure from macroeconomic and geopolitical factors, without proper position management, the specific factors of each project can make price fluctuations more unpredictable.
In short: the market is leaning towards Short, but the risk of a "Short squeeze" is increasing in some altcoins.
