Dogecoin (DOGE) is taking a hit from the recent crypto market downturn. The meme-based cryptocurrency took a significant hit on Thursday, falling 14% in value over the last 24 hours.
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Liquidated Long Positions
According to Coinglass, a crypto derivatives data platform, DOGE saw a massive US$4.8 million in long positions liquidated. This means that investors who bet on DOGE’s price rising were squeezed as the price fell. On the other hand, short positions (bets on a price drop) saw minimal liquidations of just $56,680.
![Dogecoin decimated: $5 million liquidation causes 17% price drop 2 A 34e030](https://thegurumedia.com/wp-content/uploads/2024/07/A_34e030.png)
This liquidation event coincides with a major price drop for DOGE, pushing it to a three-month low. The price is currently hovering between $0.099 and $0.117, a crucial support zone identified by blockchain analytics firm IntoTheBlock. This zone represents a large number of wallets holding DOGE, and if it holds, the price could potentially surge to $0.142.
Dogecoin is not the only one, but a leader in liquidations
While DOGE is feeling the heat, it’s not the only cryptocurrency facing liquidation issues. The broader market correction has resulted in over $321 million in total liquidations across multiple cryptocurrencies.
24-HOUR SETTLEMENT DATA
TOTAL CLEARANCES: UP TO US$ 321.28 MILLION
THE 5 MOST LIQUIDATED COINS:$BTC ~$91.51 million $ETH ~$71.90 million$SUN ~$12.84 million $DOGE ~$5.39 million $WLD ~$5.23 million #Blockchain #DeFi #sale off pic.twitter.com/e6Dv5uQbkn
– PHOENIX – Crypto News & Analysis (@pnxgrp) July 4, 2024
Interestingly, DOGE ranks fourth in the most significant liquidations, surpassing larger players like Solana (SOL). Even younger meme coins like Dogwifhat (WIF) and Pepe (PEPE) were not spared, also experiencing significant liquidations.
Dogecoin, despite its recent struggles, remains a major player in the crypto market. It operates on the Litecoin blockchain, a well-established technology, and has a market cap of over $13 billion.
A double-edged sword: no spot market pressure, but high Bitcoin correlation
There is a silver lining for DOGE. Unlike the derivatives market, the spot market (where the actual buying and selling of crypto happens) does not appear to be experiencing significant selling pressure. Data shows that DOGE buy orders are actually outpacing sell orders by nearly $1 million.
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However, the fate of DOGE seems intertwined with Bitcoin (BTC). They share a very high price correlation, meaning that even small Bitcoin sales can significantly impact the price of DOGE. Recent events such as potential Mt. Gox sales, a defunct crypto exchange, and the German government sale Confiscated Bitcoin Could Indirectly Affect DOGE Price
![Dogecoin decimated: $5 million liquidation causes 17% price drop 4 A 129455](https://thegurumedia.com/wp-content/uploads/2024/07/A_129455.png)
Will DOGE recover?
Meanwhile, Dogecoin’s technical indicators are leaning downwards. The price forecast of a 13% drop by August 4 is in line with current sentiment. The Fear and Greed Index at 29 further reinforces this bearish outlook.
Furthermore, despite having a third of the last 30 days in positive territory, Dogecoin has still experienced significant price volatility, which could indicate a continuation of the bearish trend.
Featured image from Unsplash, chart from TradingView