Este artículo también está disponible en español.
In the midst of the broader market decline, Dogecoin, the meme coin, has witnessed a price retracement of approximately 10% in the last 24 hours. Concurrently, data from Coinglass reveals that over $24 million worth of Dogecoin positions have been liquidated during this decline in the past day.
Extent of Dogecoin Liquidations Highlighted by Coinglass Data
As per Coinglass’s data, Dogecoin liquidations have been one of the most significant in the market over the past 24 hours, as leveraged positions failed to withstand the swift price drop. Specifically, Dogecoin traders experienced liquidations totaling over $24.37 million in the previous day, ranking behind only Ethereum, Bitcoin, and Solana, who saw $136.9 million, $111.54 million, and $31.48 million in liquidations, respectively.
Related Reading
Long positions made up the majority of liquidations, as bullish traders were caught off guard by the sudden sell-off. In the case of DOGE, $21.42 million worth of long positions were liquidated, while approximately $2.95 million worth of short positions were liquidated.
These liquidations were accompanied by a significant decrease in open interest in Dogecoin futures positions. According to Coinglass data, the open interest in Dogecoin currently stands at 10.31 billion DOGE tokens, reflecting a 12.37% decline within a 24-hour period. This decline in open interest indicates a cautious sentiment among Dogecoin investors as cryptocurrency bulls navigate double-digit downturns.
Potential for DOGE to Rebound?
The prevalence of liquidated long positions underscores how bullish traders were taken by surprise by the sudden sell-off, which swiftly erased many of the gains from the previous four days.
This sharp correction has halted Dogecoin’s upward momentum, which had been building up to surpass the $0.40 price level. Instead, Dogecoin bulls now face the task of defending critical support at $0.35.
Related Reading
Dogecoin’s price movement in the past week has been marked by intense activity, with a surge from $0.31 on January 1 to $0.395 on January 7, representing a 27.4% increase in six days. However, the last 24 hours have seen a 10% correction.
Nonetheless, Dogecoin continues to sustain this high trading activity, with Coinmarketcap data indicating a 90% rise in trading volume in the past 24 hours despite the liquidations. Furthermore, these types of liquidations and declines are not uncommon for Dogecoin, and many holders view them as part of the market’s dynamics.
Looking ahead, Dogecoin retains the potential for a strong recovery, especially if bulls can uphold support around the $0.35 level. A resurgence in Bitcoin’s price above the crucial $100,000 threshold could further supply the broader market momentum needed to resume Dogecoin’s rally.
At the time of writing, Dogecoin is trading at $0.3505.
Featured image created with Dall.E, chart from Tradingview.com