Bullish bets on dogecoin (DOGE) futures took a hit with $60 million in long trades being liquidated, surpassing the liquidations seen for bitcoin (BTC) futures. This drop in prices for DOGE, over 10%, is part of a larger trend of market sell-offs and a bearish sentiment in the world of cryptocurrency.
Interestingly, DOGE futures suffered more losses compared to BTC futures on Monday, as the popular meme token experienced a slide resulting in the liquidation of $60 million in long trades. Despite a brief recovery, the overall market, including major tokens and bitcoin, saw a sell-off in Asian trading hours. The CoinDesk 20 Index (CD20), which tracks the broader crypto market, showed a 3.4% decrease in the past 24 hours.
During the same period, BTC long bets saw $47 million in liquidations, while bullish bets on Ether (ETH) suffered the most with $76 million in losses. Overall, the crypto market saw over $440 million in losses as traders took profits and the dollar gained strength, impacting the market sentiment.
Analysts like Lucy Hu from Metalpha pointed out that the meme coin market, including DOGE, has been experiencing a pullback as bitcoin prices face pressure. The anticipation of a potential rate cut by the Federal Reserve has led investors to shift from riskier assets to safer ones, potentially impacting meme coins like DOGE.
Data from Coinalyze reveals that the majority of liquidation activity for DOGE in the past 24 hours came from long bets, indicating a belief in higher prices. Only a small amount, about $600,000, came from short bets against the token. These figures mark the highest liquidations for DOGE futures since May 2021, with over $44 million of liquidations happening on Huobi, a popular exchange for Asia-based traders.
Additionally, open interest in DOGE futures dropped by 16% to $600 million, while a long-short ratio suggests that traders are preparing for further declines with a ratio of 0.94, showing a bearish sentiment in the market.
Liquidation in the world of futures trading occurs when an exchange closes a leveraged position due to a trader’s inability to meet margin requirements, resulting in a loss of initial margin. This can happen when a trader doesn’t have enough funds to keep a trade open.
Overall, the liquidations in DOGE futures, along with the broader market trends, highlight the volatility and uncertainty present in the world of cryptocurrency trading. As traders navigate these fluctuations, it’s essential to stay informed and cautious in their investment decisions.