Dogecoin Faces Nearly $5M Liquidations Amidst Market Retreat

  • 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.

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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Written by on 2024-07-04 18:30:00.

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