Nearly all DOGE liquidation activity in the past 24 hours stemmed from long positions, with only about $600,000 worth of shorts, or bets against the token, being liquidated.
Investors who made bullish bets on Dogecoin (DOGE) futures suffered significantly on Monday than those who made similar bets on Bitcoin (BTC), as per a report. The dog-themed meme coin plunged in the last 24 hours, leading to $60 million in long positions being liquidated.
The price of Dogecoin nosedived 9.12% and the meme token is priced at $0.1214 at the time of writing. The trading volume of the cryptocurrency rose 152.35%, standing at $1.4 billion with a market capitalization of $17.5 billion, making it the ninth-largest coin by market cap and the largest meme cryptocurrency.
According to the report from CoinDesk, The CoinDesk 20 Index (CD20), a comprehensive measure of the broader crypto market, fell by 3.4% over the past 24 hours. Alongside DOGE, BTC long positions also experienced significant liquidations, losing $47 million.
Interestingly, liquidation happens when an exchange forcefully closes a trader’s leveraged position due to insufficient margin to maintain the trade. Basically, it is a protective mechanism to prevent further losses when a trader’s account balance falls below the required margin.
However, the bullish bets on Ether (ETH) faced the most substantial losses, totaling $76 million. In total, crypto long positions shed over $440 million as traders engaged in profit-taking, influenced by a strengthening dollar.
It is important to note that this was the largest amount liquidated in Dogecoin futures after May 2021 when the cryptocurrency had touched its all-time high of $0.7376 owing to the support from American billionaire Elon Musk.
“The meme coin market has experienced a general pullback this month as bitcoin prices face pressure,” noted Lucy Hu, a senior analyst at Metalpha, adding that “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”.
Dogecoin Liquidations and Market Data
Data from Coinanlyze revealed that nearly all DOGE liquidation activity in the past 24 hours stemmed from long positions, with only about $600,000 worth of shorts, or bets against the token, being liquidated. Leading trading platform Huobi recorded over $44 million worth of liquidations during Asian trading hours.
Moreover, the open interest in DOGE futures dropped by 16%, down to $600 million. Open interest is a measure of the number of unsettled futures bets and represents the strength of a trend. If the value increases, the trend is strong and vice versa is true as well.
The report stated that a long-short ratio tracking DOGE futures indicated a bearish market sentiment, with the ratio standing at 0.94, suggesting that traders are expecting a further decline in DOGE’s price and adjusting their positions.
According to Forbes, the total market cap of meme coins shrunk by 0.24% in the last 24 hours and some of the biggest losers include Beercoin (BEER), down by 66.6%; CatSolHat (SOLCAT), down by 13%; Shiba Inu (SHIB), down by 10%; Spike (SPIKE), down by 49.36%; and Super Trump (STRUMP), down by 18.41%.
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