The first week of March saw significant market volatility. President Trump's plan to include altcoins in the U.S. cryptocurrency reserve and the announcement of a new tax policy impacted capital flows. As a result, the liquidation volume reached over $1 billion.
The liquidation heatmaps of several altcoins indicate imbalances, suggesting potential major liquidation events.
1. XRP (XRP)
The 7-day liquidation heatmap for XRP suggests that if the price falls below $2, total long position liquidations could exceed $215 million.
The chart data indicates that traders have a greater preference for long positions over short positions in XRP. Currently, XRP is trading around $2.33, down 20% since March 3.
According to a whale alert report, 500 million XRP were unlocked from escrow on March 3, shortly after President Trump's announcement about including XRP in the U.S. cryptocurrency reserve.
Additionally, on-chain investigator ZachXBT revealed that Ripple co-founder Chris Larsen still holds over 2.7 billion XRP (worth $718 million), and addresses associated with him moved 109 million XRP (worth $19 million) to exchanges in January 2025.
These developments may raise concerns and could trigger liquidation events.
2. Solana (SOL)
The 7-day liquidation heatmap for Solana (SOL) indicates that if SOL falls to $120, long position liquidations could exceed $437 million, a further 11% drop from the current price of $136.3.
The on-chain tracking account Lookonchain reported that a wallet connected to FTX/Alameda holds 330,000 SOL (worth $431 million) and has started transferring this SOL to Binance.
"24,799 SOL (worth $3.38 million) out of the 330,000 SOL (worth $431 million) unstaked by FTX/Alameda today have been deposited into Binance," Lookonchain reported.
While the amount transferred to Binance is less than 0.1% of the total holdings, investors may speculate that more SOL could follow, creating selling pressure and potentially triggering additional liquidations.
3. Cardano (ADA)
The 7-day liquidation heatmap for Cardano (ADA) suggests that if ADA exceeds $0.90, short position liquidations could exceed $50 million, a 10% increase from the current price of $0.81.
While the liquidation size for ADA is lower than XRP or SOL, it has the highest volatility among the three. According to the latest report by Kaiko, ADA has the lowest market depth among the five altcoins included in the U.S. cryptocurrency reserve.
Market depth measures liquidity, indicating the market's ability to absorb large buy or sell orders without significant price movements.
"In particular, ADA lags behind the other strategic reserve assets and may be the most susceptible to price impact," - Kaiko report
Therefore, ADA is likely to experience the highest volatility when faced with similar market shocks, increasing the risk of liquidations.
The liquidation maps are continuously adjusted based on price movements. However, the current data reflects a highly sensitive market that could pose risks to short-term traders, especially those using high leverage.
