Dogecoin Takes a Hit: $24 Million in Liquidations as Price Plummets

The meme cryptocurrency Dogecoin experienced a significant setback in the past 24 hours, mirroring a broader market downturn. Its price has retraced approximately 10%, leading to over $24 million in liquidations, according to data from Coinglass.

Coinglass Data Reveals the Extent of the Losses

Coinglass’s data highlights the severity of the Dogecoin liquidations, placing it among the most impacted cryptocurrencies. The $24.37 million in liquidated DOGE positions trails only Ethereum ($136.9 million), Bitcoin ($111.54 million), and Solana ($31.48 million). This substantial loss underscores the volatility affecting the cryptocurrency market.

Long Positions Bear the Brunt

The majority of the liquidations, a staggering $21.42 million, involved long positions. This indicates that many bullish traders were caught off guard by the sudden price drop. Conversely, approximately $2.95 million in short positions were liquidated.

This downturn is also reflected in a significant decrease in open interest for Dogecoin futures. Coinglass reports a 12.37% drop in 24 hours, currently standing at 10.31 billion DOGE tokens. This suggests a prevailing cautious sentiment among investors.

Can Dogecoin Bounce Back?

The high volume of liquidated long positions reveals the unexpected nature of the sell-off, erasing gains accumulated over the previous four days. This sharp correction threatens Dogecoin’s upward momentum, which had been aiming for the $0.40 level. Support at $0.35 is now crucial for Dogecoin’s recovery.

Despite the recent volatility, Dogecoin maintains intense trading activity, with a 90% increase in 24-hour trading volume (Coinmarketcap). While such fluctuations are not unprecedented for Dogecoin, the current situation presents a critical juncture.

The potential for a Dogecoin rebound exists, especially if support around $0.35 holds. Furthermore, a Bitcoin price recovery above $100,000 could provide the necessary market momentum for a Dogecoin rally.

At the time of writing, Dogecoin is trading at $0.3505.

Featured image created with Dall-E, chart from Tradingview.com