Dogecoin (DOGE) is suffering because to the recent decline in the cryptocurrency market. This Thursday, the meme-based cryptocurrency saw a sharp decline in value, falling 14% in just the previous day.
Long Positions Liquidated
The cryptocurrency derivatives tracking site Coinglass reports that DOGE saw a staggering $4.8 million in long positions liquidated. This means the price decline squeezed investors who had gambled on DOGE’s price gain. On the other hand, modest liquidations occurred for short positions (bets on a price fall) at only $56,680
This liquidation event brings DOGE’s price down to a three-month low at the same time as a significant decline. The price is presently between $0.099 and $0.117, which is a critical support zone that the blockchain analytics company IntoTheBlock found. If this zone holds, it indicates that a lot of wallets are keeping DOGE, and the price may rise back up to $0.142.
Dogecoin Not Alone, But A Leader In Liquidations
Although DOGE is under pressure, it’s not the only cryptocurrency having problems with liquidation. A total of roughly $321 million in cryptocurrency liquidations were the outcome of the larger market slump.
LIQUIDATION DATA IN 24 HOURS
TOTAL LIQUIDATIONS: UP TO $321.28M
TOP 5 COINS WITH HIGHEST LIQUIDATION:$BTC ~ $91.51M $ETH ~ $71.90M$SOL ~ $12.84M $DOGE ~ $5.39M $WLD ~ $5.23M #Blockchain #DeFi #liquidation pic.twitter.com/e6Dv5uQbkn
— PHOENIX – Crypto News & Analytics (@pnxgrp) July 4, 2024
It’s interesting to see that DOGE, having surpassed larger participants like Solana (SOL), comes in at number four for most major liquidations. Not even more recent meme currencies like Dogwifhat (WIF) and Pepe (PEPE) have escaped the damage; they have also seen large liquidations.
Even with its recent setbacks, Dogecoin is still a major participant in the cryptocurrency space. It is based on the well-established Litecoin blockchain and has a market capitalisation of more over $13 billion
DOGE is currently trading at $0.09. Chart: TradingView
A Double-Edged Sword: No Spot Market Pressure, But High Bitcoin Correlation
There is a bright side for DOGE. The spot market, which is where real cryptocurrency purchases and sales take place, does not appear to be under as much selling pressure as the futures market. According to data, purchase orders for DOGE are actually exceeding sell orders by about $1 million.
But it appears that Bitcoin (BTC) and DOGE have a same destiny. Due to their strong price association, even slight declines in Bitcoin can have a big effect on the price of DOGE. The price of DOGE may be indirectly impacted by recent events such as possible sell-offs from the failed cryptocurrency exchange Mt. Gox and the German government’s sale of Bitcoin that has been seized.
Will DOGE Rebound?
Meanwhile, the technical indications for Dogecoin are pointing downward. The price forecast of a 13% decline by August 4th is in line with the general attitude. The Fear and Greed Index, which is now at 29, confirms this gloomy prediction.
Furthermore, Dogecoin’s price fluctuated a lot even though it spent a third of the previous 30 days in positive territory, which would mean that the decline will continue.
Featured image from Unsplash, chart from TradingView