- Dogecoin (DOGE) experienced a significant market setback with $60 million in long trades liquidated, surpassing Bitcoin (BTC) futures liquidations, as DOGE prices dropped over 10% amid a broader crypto market sell-off.
- Data indicates nearly all liquidations came from long positions, with the highest level of DOGE futures liquidations since May 2021, reflecting a bearish sentiment and a shift of investors towards less risky assets.
Dogecoin (DOGE), the beloved meme token, recently faced a significant market setback. Bullish bets on DOGE futures were hit hard, leading to $60 million in long trades being liquidated. This surpasses the liquidation levels seen for Bitcoin (BTC) futures, highlighting a troubling time for DOGE investors.
DOGE Faces a Double-Digit Drop
The liquidations occurred as DOGE prices plummeted over 10%, reflecting a broader sell-off in the cryptocurrency market. This downturn wasn’t isolated to DOGE; it mirrored a bearish sentiment spreading across major tokens, with the CoinDesk 20 Index (CD20) dropping 3.4% in the past 24 hours. Bitcoin (BTC) long bets saw $47 million in losses, while Ether (ETH) topped the charts with a staggering $76 million in bullish bets liquidated. Overall, the crypto market experienced over $440 million in long liquidations.
Lucy Hu, a senior analyst at Metalpha, noted, “The meme coin market has experienced a general pullback this month as bitcoin prices face pressure. The expectation of one rate cut by the Fed has prompted investors to divert from risky assets to less risky ones, and DOGE may suffer as one of the largest meme coins on the market.”
Market Data and Insights
Data from Coinanlyze reveals that nearly all the DOGE liquidation activity in the past 24 hours came from long positions, with only about $600,000 worth of short positions being liquidated. This marks the highest level of DOGE futures liquidations since May 2021. Of the $60 million liquidated, $44 million occurred on Huobi, a crypto exchange favored by Asia-based traders.
The open interest, which indicates the number of unsettled futures bets, dropped 16% to $600 million. Additionally, the long-short ratio for DOGE futures stands at 0.94, signaling a bearish outlook among traders.
Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to insufficient margin to cover potential losses. This means traders don’t have enough funds to maintain the trade, resulting in a forced closure by the exchange.
This significant liquidation event underscores the volatility and risk inherent in the crypto market, especially for speculative assets like Dogecoin. As the market grapples with broader economic pressures and shifting investor sentiment, meme coins like DOGE may continue to face turbulent times ahead.
