Dogecoin Trading Volume Rises Over $6.5 Billion As Liquidations Cross $31 Million, What’s Going On?

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As a seasoned researcher with years of experience in the volatile and dynamic world of cryptocurrencies, I find myself once again observing the turbulent waters of Dogecoin trading. The recent surge in trading volume and liquidations, driven by a significant price drop for DOGE, is a familiar sight to those who have weathered many crypto market storms before.

In the past 24 hours, there’s been a substantial increase in Dogecoin trading activity and liquidations. This spike can be attributed to the steep decline in Dogecoin’s price, which has dropped more than 5% over the same period.

Dogecoin Trading Volume And Liquidations Witness Significant Spike

According to CoinMarketCap, the trading volume of Dogecoins has soared by more than 57% within the past day, reaching over $6 billion. Simultaneously, Coinglass reports that Dogecoin’s liquidations surpassed $31 million during this period, with approximately $25 million and $5.8 million in long and short positions being closed respectively.

The value of long (buy) positions in Dogecoin suffered significantly when its price fell below $0.4. This downturn was triggered by Jerome Powell’s speech suggesting a negative outlook for Dogecoin, which is the most popular meme coin. As crypto analyst Kevin Capital explained, Dogecoin’s technical analysis pointed towards bearish trends even before this event, and unfavorable macroeconomic conditions further worsened the situation.

Powell indicated that it’s probable that the Federal Reserve will halt interest rate reductions next year, causing a surge of bearish feelings among traders and triggering a series of sell-offs. This increase in trading activity was due to investors attempting to unload their cryptocurrencies, as they perceived the Fed’s hawkish stance as unfavorable for risky assets such as Dogecoin.

From my perspective as an analyst, I hold the viewpoint that the recent reactions by traders to Jerome Powell’s speech might be exaggerated. Regarding Dogecoin, I am optimistic that it will bounce back from this correction, predicting that the current dip will be absorbed by buyers. It is essential to take into account Dogecoin’s relationship with Bitcoin, as I have previously suggested that Dogecoin’s future trajectory could well depend on Bitcoin’s next move.

Currently, the price of Bitcoin has fallen under the significant $100,000 mark, giving off a pessimistic vibe. This bearish trend in Bitcoin makes it improbable for Dogecoin’s value to bounce back just yet. However, a bullish turnaround in Bitcoin could potentially trigger a recovery for Dogecoin.

Increased Volatility Is Not Unusual

Crypto expert Master Kenobi weighed in on Dogecoin’s price decrease, noting that heightened volatility during a bull market isn’t uncommon. He advised traders not to panic and instead maintain their investments, as he believes market manipulators would rather see traders lose 90% of their investment than experience a 10-fold return. This observation was made by him.

Bitcoinist has shared that Dogecoin sentiment has turned negative again, possibly indicating that its owners might consider selling their coins at a loss. However, Kevin Capital previously expressed optimism, stating that the bull run for Dogecoin is not yet over. This implies that being pessimistic isn’t warranted at this moment, even with the price adjustment. Instead, he suggests long-term holders to remain patient and wait for prices to rise.

Currently, as I’m typing this, the price of Dogecoin is approximately $0.36. However, in the past 24 hours, it has decreased by more than 5%, based on information from CoinMarketCap.

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2024-12-20 05:46