Dogecoin Futures Witness Largest Liquidations since May 2021

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As a crypto investor with some experience under my belt, I’ve learned that the market can be unpredictable and volatile at times. And Monday was a prime example of that, especially for those who made bullish bets on Dogecoin (DOGE) futures. While Bitcoin (BTC) long positions also experienced significant liquidations, losing $47 million, it was nothing compared to the $60 million in DOGE long positions that were wiped out.

According to a recent report, investors who had taken an optimistic stance on Dogecoin (DOGE) futures endured greater losses than those who made comparable wagers on Bitcoin (BTC) during Monday’s trading session. The value of DOGE dropped dramatically within the last day, resulting in approximately $60 million worth of long positions being terminated.

As a researcher studying the cryptocurrency market, I’ve observed that Dogecoin experienced a significant price drop of 9.12%, resulting in a current value of $0.1214. The trading activity for this meme token saw a substantial increase of 152.35%, with a volume of $1.4 billion. Consequently, Dogecoin holds a market capitalization of $17.5 billion and ranks as the ninth-largest coin by market cap among all cryptocurrencies, making it the largest meme cryptocurrency in existence.

As a crypto investor, I’ve noticed that the CoinDesk 20 Index (CD20), which represents the broader crypto market, took a hit of 3.4% in the last 24 hours, based on the report from CoinDesk. My long positions in Bitcoin and Dogecoin were among those affected, resulting in a loss of approximately $47 million in value.

As a crypto investor, I’ve come across the concept of liquidation, which is an exchange’s measure to protect itself and other traders when my leveraged position becomes at risk due to insufficient margin. Essentially, if my account balance drops below the necessary margin level to sustain the trade, the exchange will forcibly close my position to prevent any potential losses from mounting further. It serves as a safety net in the volatile world of crypto trading.

Despite bearing the brunt of losses, bullish wagers on Ether (ETH) amounted to a significant sum of $76 million. The aggregate red ink from crypto long positions reached approximately $440 million. Traders, spurred on by a robust US dollar, opted to book profits.

Noteworthy is the fact that this was the greatest quantity of Dogecoin futures liquidated since May 2021, which marked the peak price of $0.7376 for the cryptocurrency. This significant event can be attributed to the backing provided by American entrepreneur Elon Musk.

According to Lucy Hu, a senior analyst at Metalpha, the meme coin market has seen a broad decline this month due to bitcoin’s price instability. Hu explained that investors have been shifting their funds towards less risky assets in anticipation of a single interest rate reduction by the Federal Reserve, which could negatively impact meme coins like DOGE as one of the larger players in the market.

Dogecoin Liquidations and Market Data

According to Coinanlyze’s findings, almost all DOGE liquidation transactions in the previous 24 hours were linked to long positions, amounting to approximately $600,000 in shorts being liquidated. Huobi, a prominent cryptocurrency exchange, reported over $44 million in liquidations during Asian trading sessions.

Additionally, the open interest in DOGE futures decreased by 16%, now standing at approximately $600 million. Open interest signifies the quantity of unfilled future contracts and serves as a barometer for market trend strength. A rising open interest indicates a robust trend, whereas a decline signals weakening momentum.

The report revealed that a 0.94 long-short ratio for DOGE futures in the market suggested a bearish outlook among traders. This figure implied that these traders anticipated a drop in DOGE’s price and were making corresponding adjustments to their positions.

Based on Forbes’ report, the overall value of meme coins decreased by 0.24% within the past 24 hours. Several notable coins experienced significant losses: BEER, the price of which dropped by 66.6%; SOLCAT saw a decline of 13%; SHIB fell by 10%; SPIKE suffered a loss of 49.36%; and STRUMP decreased by 18.41%.

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2024-06-18 16:01