The recent wave of sell-offs in the Dogecoin market has severely impacted traders who had leveraged bullish expectations. According to CoinGlass data, Dogecoin trading witnessed liquidations amounting to $7.82 million, where $7.32 million were attributed to long positions while $503,630 came from short positions. This led to a staggering 1,453% disparity in liquidations between long and short positions.
Intensifying Selling Pressure
Dogecoin has once again come under selling pressure amid a broader retreat in the cryptocurrency market. Over the past 24 hours, the asset declined by 1.26% to $0.0873, bringing the weekly loss to 7.26%. This price action indicates that the market’s short-term recovery hopes have not materialized.
The decline in Dogecoin extended into the fourth day. After peaking at $0.097 on October 4, buying interest waned, resulting in a gradual price reduction since Monday. Wednesday saw the steepest daily loss, closing at a 5.41% decrease. The anticipated rebound did not materialize, and selling pressure persisted into the early hours of Thursday.
CoinGlass data reveal $7.82 million in liquidations within Dogecoin trades, primarily from $7.32 million in long positions.
Leveraged Trades Magnify Market Strain
As prices continued to decline, investors holding leveraged long positions faced forced liquidations. Dogecoin’s price slipped below both the 50-day moving average of $0.0892 and the 200-day moving average of $0.087. Early Thursday saw prices dip to as low as $0.0855.
This scenario favored investors with short positions. On-chain analytics platform Lookonchain highlighted that an investor, identified by the code 0xdd6a, maintained profitable positions with 20x leverage across BTC, ETH, SOL, XRP, and DOGE. These positions, totaling $26.5 million, resulted in an unrealized profit of $586,000.
Lookonchain reported that the 0xdd6a coded investor, holding 20x leveraged short positions worth $26.5 million, achieved an unrealized profit of $586,000.
Significant Transfers Spotted
Lookonchain data indicate that this investor’s 48.37 million DOGE position, valued at $4.24 million, contributed substantially to the total profit, generating approximately $224,000. This underscores the prominence of short trades in a declining market.
Meanwhile, Whale Alert highlighted a significant transfer of 304,709,765 DOGE, worth $27,045,644, from an unknown wallet to Binance amid prevailing selling pressures. Transfers of this magnitude to major exchanges are typically interpreted by market participants as potential indicators of impending sales.
