- Dogecoin experienced a sharp decline of over 10%, resulting in $60 million worth of long positions being liquidated, primarily on Huobi.
- This marks the largest liquidation event for Dogecoin since 2021, amid broader market turbulence influenced by macroeconomic factors and investor sentiment.
In a significant shake-up for the memecoin community, Dogecoin, the leading memecoin by market cap, experienced a drastic drop of over 10%. This sudden decline resulted in a staggering $60 million in DOGE futures being liquidated. The bulk of these liquidations, more than $44 million, occurred on the Huobi exchange.
The majority of the liquidated positions were longs, indicating that many investors had been betting on Dogecoin’s price to rise. In stark contrast, only $600,000 worth of DOGE shorts, which are bets on the price dropping, were liquidated in the same period. This disparity underscores the heavy losses faced by bullish investors.
A Flashback to 2021: Unseen Liquidation Levels
The scale of the liquidations marks a level of turmoil not seen since 2021. This has left Dogecoin enthusiasts and the broader memecoin market in a state of concern. Compared to Dogecoin, Bitcoin (BTC) experienced $47 million in liquidations, despite a similar percentage drop in value. Ethereum longs were hit even harder, with $76 million worth of contracts liquidated.
The entire crypto market has been experiencing turbulence for over a week. Macroeconomic factors are driving investors away from risky assets like cryptocurrencies, instead favoring more stable investments. Hopes for a rate cut from the Federal Reserve have been dashed, adding to the reluctance to invest in volatile assets like crypto.
Last week saw a brief rally in BTC and other cryptocurrencies when inflation reports came in better than expected. However, the positive news was not enough to sustain a longer rally. The Fed’s decision not to cut interest rates further dampened investor sentiment. Additionally, a strong dollar, buoyed by political uncertainties in Europe, has added to the downward pressure on crypto values.
Bitcoin is also facing significant resistance in its attempts to increase in value. Bitcoin ETFs have seen substantial net outflows, with $146 million withdrawn on Monday and $580 million the previous week. This trend highlights the ongoing struggles within the crypto market.
The recent drop in Dogecoin’s value and the substantial liquidations of long positions have sent shockwaves through the memecoin community. As macroeconomic factors continue to influence investor behavior, the future of Dogecoin and other cryptocurrencies remains uncertain. The market’s resilience will be tested in the coming weeks as it navigates these turbulent times.
