Bullish bets on Dogecoin futures took a huge hit on Monday, with liquidations totaling $60 million as the price of the meme token fell more than 10% before briefly recovering. This decline was accompanied by a selloff in major tokens, including Bitcoin, during Asian trading hours. The CoinDesk 20 index, which tracks the broader cryptocurrency market, fell 3.4% over the past 24 hours.
Long Bitcoin positions lost $47 million, while bullish Ethereum bets took the biggest hit, losing $76 million. According to traders on Tuesday, long cryptocurrency positions were liquidated totaling in excess of $440 million due to profit taking and the strengthening dollar.
“The meme coin market has generally pulled back this month as Bitcoin prices have come under pressure,” said Lucy Hu, senior analyst at Metalpha. She said, “Expectations of a rate cut from the Federal Reserve have prompted investors to shift from risky assets to safer assets, with DOGE being one of the biggest meme coins on the market.”
According to data from Coinanlyze, almost all DOGE liquidation activity over the past 24 hours has been on long positions, with only about $600,000 worth of short positions liquidated. This figure represents the highest level for DOGE futures since May 2021, with over $44 million liquidated on Huobi, the preferred cryptocurrency exchange for Asia-based traders.
Open interest, or the total number of outstanding futures bets, fell 16% to $600 million. Additionally, the long/short ratio tracking DOGE futures indicated bearish sentiment at 0.94, suggesting traders are bracing for further declines.
Liquidation occurs when an exchange is forced to close a trader’s leveraged position due to loss of part or all of the trader’s initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position. This means you don’t have enough funds to keep trading going.
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