The cryptocurrency market experienced a significant downturn on Tuesday, with major tokens such as Bitcoin and Ether experiencing substantial declines. This market-wide sell-off was particularly pronounced for the meme cryptocurrency Dogecoin (DOGE), which saw over $60 million in long positions liquidated - the largest such event since May 2021.
Dogecoin's price dropped by more than 10% over the past 24 hours, contributing to the broader crypto market sell-off that led to a 3.4% decline in the CoinDesk 20 Index (CD20).
This sharp decline in DOGE's price triggered a cascade of liquidations, with over $60 million in long positions being forcefully closed by exchanges due to traders' inability to meet margin requirements.
Interestingly, the liquidations in DOGE futures outpaced those of Bitcoin (BTC), which saw around $47 million in long positions liquidated. Ethereum (ETH) longs suffered the most significant losses, with $76 million in bullish bets being liquidated.
According to analysts, the meme coin market has undergone a general pullback this month as Bitcoin faces price pressure. The expectation of a single interest rate cut by the Federal Reserve in 2024 has led investors to move away from riskier assets and towards less risky ones, with DOGE potentially suffering as one of the largest meme coins on the market.
Data from Coinanlyze reveals that almost all the liquidation activity in DOGE futures within the past 24 hours originated from long positions, with short positions (bets against the token) accounting for only about $600,000 worth of liquidations. This suggests that the majority of traders were caught off guard by the sudden price drop, leading to a significant unwinding of their bullish bets.
The highest liquidation figures for DOGE futures have been recorded since May 2021, with over $44 million of the liquidations taking place on Huobi, a popular crypto exchange among Asia-based traders. This indicates that the DOGE sell-off was not limited to a specific region or exchange, but rather a broader market phenomenon.
The open interest, or the number of unsettled futures bets, has dropped by 16% to $600 million, further reflecting the bearish sentiment in the market. Additionally, the long-short ratio tracking DOGE futures shows traders are preparing for further declines, with the ratio at 0.94 – indicating a bearish bias.
In conclusion, the Dogecoin market experienced a significant downturn, with over $60 million in long positions being liquidated - the largest such event since May 2021. This sell-off was driven by the broader crypto market decline, as well as the expectation of a single interest rate cut by the Federal Reserve in 2024, which has led investors to move away from riskier assets. The liquidation data suggests that the majority of traders were caught off guard by the sudden price drop, leading to a significant unwinding of their bullish bets.
Top comments (2)
The recent crypto market downturn, especially the significant Dogecoin liquidations, really shows how volatile things can get. It's a good reminder to stay cautious and always be prepared for sudden market changes.
Not that surprising. It's the meme market. We all know what we're getting ourselves into there...