The third week of January 2026 saw a spike in cryptocurrency market volatility, with total market-wide liquidations reaching nearly $900 million. Analysts attribute the negative volatility primarily to geopolitical pressures, specifically the impact of former President Trump's proposed tariffs on the EU, which triggered a broader risk-off sentiment across financial markets.
Three altcoins—XRP, Axie Infinity (AXS), and Dusk (DUSK)—have been identified as having particularly high liquidation risks due to a combination of leveraged trading activity and conflicting market expectations. Data from Coinglass and CryptoQuant reveals critical price levels that could trigger cascading liquidations for both long and short positions.
XRP experienced a significant leverage reset on January 18, with forced long liquidations exceeding $5 million in a single day. According to CryptoQuant data shared by analyst Amr Taha, Binance was the largest contributor, accounting for approximately $1.05 million of these liquidations. The event coincided with XRP's price dropping to $1.85 before a slight rebound to $1.95. The liquidation map suggests that if XRP were to rebound to $2.29, it could liquidate over $600 million in short positions. Conversely, CryptoQuant data indicates strong "whale" demand at prices below $2.4, with large order activity at a 2026 high, potentially front-running a recovery.
Axie Infinity (AXS) has rallied over 120% year-to-date, driven by founder plans to convert rewards into a new utility token, bAXS, as part of a broader 2026 tokenomics overhaul. This surge has attracted leveraged long positions. However, the 7-day liquidation map shows a potential $12 million in long liquidations if the price corrects. A concerning counter-trend is a sharp increase in exchange deposits, with the 7-day average reaching a three-year high, signaling potential profit-taking and selling pressure that could endanger these long bets.
Dusk (DUSK) has emerged as a standout in the privacy coin sector, rallying nearly sixfold since the start of the year as capital rotates from larger-cap alternatives. Despite triggering significant short liquidations recently, the current liquidation map is dominated by long-side risk. Analysts warn of a potential repeat of a pattern seen with DASH in October of the previous year, which surged sixfold before crashing 60% the following week. If DUSK's price falls below $0.13, long liquidations could reach $12 million. Rising exchange inflows further indicate profit-taking pressure.
The situation underscores a market where geopolitical macro pressures are clashing with internal token-specific dynamics, creating a complex and risky environment for leveraged traders. Analysts emphasize that without strict risk management, traders on both sides of these altcoins face significant liquidation risks.
