Dogecoin (DOGE) is suffering from the recent crypto market downturn. The meme-based cryptocurrency took a big hit on Thursday, dropping 14% in value over the past 24 hours.
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Long Positions Terminated
According to Coinglass, a crypto derivatives data platform, DOGE saw $4.8 million in long positions closed. This means that investors who bet on the DOGE price going up are squeezed as the price goes down. In contrast, short positions (betting on the decline in price) saw little liquidation at just $56,680.
This liquidation event coincides with a major price drop for DOGE, bringing it to a three-month low. The price is currently between $0.099 and $0.117, an important support zone identified by IntoTheBlock, a blockchain analytics company. This position represents a large number of wallets holding DOGE, and if it holds, the price may return to $0.142.
Dogecoin Not Alone, But A Leader In Blockchain
While DOGE is feeling the heat, it is not the only cryptocurrency facing liquidation woes. The extensive market correction resulted in more than 321 million coins in total creation across various cryptocurrencies.
PERFORMANCE DATA IN 24 HOURS
TOTAL WARRANTIES: UP TO $321.28M
TOP 5 HIGHEST ASSETS:$BTC ~ $91.51M $ETH ~ $71.90M$SOL ~ $12.84M $DOGE ~ $5.39M $WLD ~ $5.23M #Blockchain #DeFi #elimination pic.twitter.com/e6Dv5uQbkn
– PHOENIX – Crypto News & Analytics (@pnxgrp) July 4, 2024
Interestingly, DOGE takes the fourth place for the most important completions, surpassing major players like Solana (SOL). Even small meme characters like Dogwifhat (WIF) and Pepe (PEPE) have not been left out, experiencing significant elimination as well.
Dogecoin, despite its recent struggles, remains an important player in the crypto market. It runs on the Litecoin blockchain, a well-established technology, and boasts a market capitalization of over $13 billion.
A Double-Edged Sword: No Spot Market Pressure, But High Bitcoin Correlation
There is a silver lining to DOGE. Unlike the derivatives market, the spot market (where the actual buying and selling of crypto takes place) does not seem to have much selling pressure. The data shows that DOGE’s buy orders actually exceed sell orders by almost $1 million.
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However, the fate of DOGE seems to be tied to Bitcoin (BTC). They share a very high price correlation, which means that even a small sell in Bitcoin can have a big impact on the price of DOGE. Recent events such as the possible sale from Mt. Gox, a defunct crypto exchange, and the German government selling confiscated Bitcoin, may indirectly affect the value of DOGE.
Will DOGE make a comeback?
Meanwhile, Dogecoin’s technical indicators lean bearish. Projecting a 13% price drop on August 4 is in line with current sentiment. The Fear and Greed Index at 29 further reinforces this bearish view.
Additionally, despite having a third of the last 30 days in a positive position, Dogecoin is still experiencing significant price volatility, which could indicate a continuation of the decline.
Featured image from Unsplash, chart from TradingView
