Dogecoin Faces Nearly $5M Liquidations Amidst Market Retreat

As the general cryptocurrency markets take a bearish turn, long plays on Dogecoin pile up to nearly $5M.

Doge sitting on coins winking with his tongue out.
Created by Kornelija Poderskytė from DailyCoin
  • General crypto markets witnessed a downtick, taking away $300M in liquidations.
  • Dogecoin sees an 80% hike in Derivatives volume as short-sellers defeat the bulls.
  • Relative Strength Index (RSI) labels DOGE ultra oversold, but there’s a catch.

Dogecoin has experienced a massive downturn, as the crypto bears placed the token in the crossfires of the ongoing market-wide meltdown this Thursday. Dropping over 7% in value in 24 hours, DOGE witnessed $4.85 million in overall liquidations in Derivatives markets, with the lion’s share of them consisting of long positions.

Bulls Battered as DOGE Hits 3-Month Low

Per the latest Derivatives markets data from CoinGlass, $4.80 million of long Dogecoin positions were liquidated, while liquidated short placements comprised just $56.68K in 24-hour liquidations. This comes at a sensitive moment for the largest meme asset, as DOGE plunged to a three-month low today.

Doge stats.

Along with Bitcoin’s (BTC) slide below $58K, DOGE slipped to the lower support bubble between $0.099 and $0.117. According to IntoTheBlock, this support cluster includes 41.61B DOGE, split between 166.29K crypto wallets. If the current support cluster holds, Dogecoin would not face strong resistance up to $0.142, where traders are more likely to start taking profits.

Can Dogecoin Dodge the Bears?

In a broader perspective, Dogecoin’s record-high liquidations are the first largest in today’s crypto market pullback. With overall liquidations topping $321 million, DOGE comes fourth, falling behind BTC’s $91.51M, Ethereum’s (ETH) $71.9M, and Solana’s (SOL) $12.84M in 24-hour liquidations.

Dogecoin’s younger meme peers Dogwifhat (WIF) and Pepe (PEPE) faced an identical liquidation tsunami with $3M and $4.07M eroded, respectively. Judging by the combined liquidity book, DOGE isn’t facing any selling pressure on Spot markets, as DOGE bids outsourced executed sales by nearly $1 million, according to CoinPaprika.

However, it must be noted that DOGE sports an ultra-high price correlation with Bitcoin, currently pointing to 0.91. This means that even with mild selling pressure, DOGE’s price fluctuations can be affected by high-profile BTC sell-offs, such as Mt. Gox or the German government. As of press time, DOGE briefly plunged below $0.11, totaling the monthly downturn to a 30% deficit.

On the Flipside

  • According to TradingView, Dogecoin’s four-hour technical trading pattern shows its Relative Strength Index (RSI) at an extremely oversold condition, pointing to 11.43 in real-time.
  • While this is a sign of resilience and plausible reinforcement, it’s also worth noting that Dogecoin’s Chaikin Money Flow (CMF) index is performing below zero, currently at -0.23, hinting at slimming liquidity.

Why This Matters

Dogecoin operates on the second largest blockchain via Proof of Work (PoW) consensus and comprises a global market capitalization of $16B.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.