3 Altcoins on the Brink of Major Liquidations as August Closes

Key Takeaways

• Ethereum (ETH): $70 billion in open interest signals extreme leverage, with potential long liquidations of up to $6 billion if ETH dips below $4,100.

• Dogecoin (DOGE): A breakout above $0.25 could trigger $200 million in short liquidations, while a drop below $0.20 risks more than $170 million in long liquidations.

• Hyperliquid (HYPE): A correction to $39 may liquidate $80 million in longs, whereas a surge past $50 could liquidate around $24 million in shorts.

  
  

Introduction

After three consecutive weeks of bullish performance, the altcoin market cap (TOTAL3) opened the last week of August in the red. This sudden shift highlights the fragile balance between bearish and bullish forces currently shaping the crypto markets. The outcome of this week may very well determine whether the final months of the year lean toward sustained rallies or sharp corrections.

What makes this week particularly volatile is the surge in open interest (OI) across major altcoins. Elevated OI often signals heavy leverage in the system, increasing the risk of large-scale liquidations if prices swing sharply in either direction. Among the most exposed altcoins are Ethereum (ETH), Dogecoin (DOGE), and Hyperliquid (HYPE), each showing significant liquidation zones on their trading maps.

Ethereum (ETH)

Ethereum continues to dominate derivatives markets, having reached a record $70 billion in open interest on August 23, its highest level ever, according to Coinglass. As of the latest update, OI remains close to $69.8 billion, reflecting the intensity of leveraged positions across exchanges.

Such high levels of open interest are both a sign of market confidence and a red flag for potential volatility. Ethereum’s seven-day liquidation map reveals that long positions slightly outweigh short positions, suggesting traders remain optimistic. However, this also means downside moves could cause outsized losses for those betting on continued gains.

If ETH extends its rally beyond $5,100, it could spark short liquidations totaling nearly $4.1 billion. Conversely, if ETH retraces and breaks below $4,100, long liquidations could rise to nearly $6 billion.

Further signals point to increased sell-side pressure. Recent on-chain data indicates that older ETH holdings are moving, a classic precursor to profit-taking. Validator Queue data also shows more than 846,000 ETH awaiting unstaking—capital that could potentially re-enter the market and intensify selling pressure.

These combined factors suggest that while bulls dominate sentiment, Ethereum’s rally is on fragile ground, making long positions especially vulnerable this week.

Dogecoin (DOGE)

Dogecoin is at a pivotal moment, with price action forming a large symmetrical triangle pattern that is approaching its apex. This setup implies a breakout is imminent, with the final week of August likely to decide DOGE’s next major move.

Crypto analyst KALEO remains bullish, predicting a sharp upward breakout:

This aligns with investor hopes for an incoming altcoin season, which many believe could fuel DOGE’s rally. A confirmed breakout above $0.25 could unleash over $200 million in short liquidations as bearish bets unwind.

On the flip side, if DOGE fails to hold support and dips below $0.20, long liquidations exceeding $170 million could occur.

Currently, data shows that short liquidation volumes outweigh long volumes, indicating that bearish traders may face greater pressure if momentum turns upward. However, the 6% pullback on August 25 weakened bullish sentiment, leaving the market at a critical crossroads.

DOGE’s movement this week will likely set the tone for meme coins and may influence broader speculative flows in the altcoin sector.

Hyperliquid (HYPE)

Hyperliquid (HYPE) has emerged as one of the most leveraged tokens in the market, with liquidation maps showing a strong long-heavy imbalance. This suggests most traders are betting on the upside, but also exposes the token to steep downside risks.

If HYPE drops to $39, nearly $80 million in long liquidations could occur. Meanwhile, a breakout above $50 would liquidate about $24 million in shorts.

The bullish bias is reinforced by high-profile endorsements. Arthur Hayes, co-founder of BitMEX, even suggested HYPE could deliver a 126x price increase, further fueling speculative positioning.

Additionally, Syncracy Capital reported that Hyperliquid’s Bitcoin spot market volumes recently surpassed those of Coinbase and Bybit combined, underlining its surging popularity.

These dynamics explain why HYPE’s market remains skewed toward bullish bets, though the risk of a liquidation cascade on a downturn remains high.

Conclusion

The final week of August presents a make-or-break scenario for several major altcoins. Ethereum’s $70 billion in open interest, Dogecoin’s breakout setup, and Hyperliquid’s long-heavy positioning all highlight a market environment fraught with both opportunity and danger.

For traders, this means two things: high reward potential if momentum continues upward, but equally high liquidation risks if the market turns against the crowd. Elevated leverage levels make swift and violent moves more likely, underscoring the need for careful risk management.

In short, this week could determine not only the fate of these three assets but also the broader sentiment across the altcoin market heading into September.

Frequently Asked Questions

Why is high open interest (OI) risky for Ethereum and other altcoins?

High OI indicates a large amount of leverage in the market. While it shows strong trading activity, it also means that price swings can trigger mass liquidations, amplifying volatility.

What price levels are critical for Ethereum this week?

Ethereum risks up to $6 billion in long liquidations if it falls below $4,100, while a move above $5,100 could trigger $4.1 billion in short liquidations.

How important is Dogecoin’s triangle pattern?

The symmetrical triangle pattern signals an impending breakout. A rise above $0.25 may push DOGE toward $0.40 – $0.50, but a fall below $0.20 could unleash over $170 million in long liquidations.

Why is Hyperliquid attracting so much attention?

HYPE is heavily skewed toward long bets, with nearly $80 million at risk if the price drops to $39. Its rising popularity, high trading volumes, and bold predictions (such as Arthur Hayes’ 126x forecast) have drawn speculators en masse.

What should traders do in such a volatile week?

Traders should monitor key liquidation levels, manage leverage carefully, and remain alert for sudden market swings. In weeks like this, both caution and flexibility are crucial.