Dogecoin liquidations reach $24 million as bulls endure double-digit defeat

During the recent downturn in the market, Dogecoin, the meme coin, has experienced a 10% price retracement within the last 24 hours. Additionally, data from Coinglass reveals that over $24 million worth of Dogecoin positions have been liquidated as a result of this decline.

Significance of Dogecoin Liquidations Revealed by Coinglass Data

Analysis from Coinglass data indicates that Dogecoin liquidations have been particularly notable in the market over the past day. Leveraged positions could not withstand the rapid drop in price, leading to substantial losses. Dogecoin traders faced liquidations amounting to over $24.37 million, ranking behind Ethereum, Bitcoin, and Solana in terms of liquidated value which stood at $136.9 million, $111.54 million, and $31.48 million respectively.

Most of the liquidations were from long positions, as bullish traders were taken by surprise by the sudden sell-off. Long positions in DOGE totaled $21.42 million in liquidations, while short positions accounted for around $2.95 million in liquidated value.

These liquidations coincided with a significant decrease in open interest in Dogecoin futures trading. Based on Coinglass data, the open interest for Dogecoin currently stands at 10.31 billion DOGE tokens, marking a 12.37% decline within a day. This decline suggests a cautious sentiment among Dogecoin investors as the market experiences significant downward trends.

Will DOGE Recover?

The prevalence of liquidated long positions highlights the unexpected nature of the recent sell-off which swiftly erased previous gains over the last four days.

This sharp correction has disrupted Dogecoin’s upward trajectory, which was aiming to surpass the $0.40 price level. Instead, Dogecoin supporters now face the challenge of defending the crucial support at $0.35.

In the past seven days, Dogecoin’s price movement has been characterized by heightened volatility, soaring from $0.31 on January 1 to $0.395 on January 7, marking a 27.4% rise in just six days. However, a 10% pullback occurred within the last 24 hours.

Despite the liquidations, Dogecoin continues to witness intense trading activity, with a 90% surge in trading volume reported by Coinmarketcap in the past day. These fluctuations are not uncommon for Dogecoin, with many holders viewing them as part of the market’s natural ebb and flow.

Looking ahead, Dogecoin still has the potential for a robust recovery, especially if traders manage to sustain support around the $0.35 mark. A resurgence in Bitcoin’s price above the critical $100,000 level could also provide the necessary market momentum to reignite Dogecoin’s upward momentum.

At present, Dogecoin is trading at $0.3505.