3 Altcoins Facing Major Liquidation Risks in the First Week of January

TL;DR:

Positive sentiment shows signs of returning to the market in the first week of January, pushing altcoins toward a recovery. However, doubts remain over whether this rebound can last.

Key Points:

Background:

Cryptocurrency liquidations occur when leveraged trading positions are automatically closed by exchanges due to insufficient margin. Large-scale liquidation events, often called liquidation cascades, can trigger dramatic price movements as positions are forcefully sold or bought back.

Why It Matters:

Liquidation events reveal the extent of leveraged positions in the market and can cause or accelerate significant price volatility. Understanding liquidation dynamics helps traders assess market risk and potential volatility triggers in cryptocurrency markets.