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Long position traders in the Dogecoin (DOGE) ecosystem are again in the spotlight as massive liquidation hits the ecosystem. In an unprecedented liquidation imbalance, Dogecoin traders betting long on the meme coin saw $21.71 million wiped out in the last 24 hours.
Dogecoin and overwhelming liquidation trend
According to o CoinGlass data, the total liquidation in the DOGE ecosystem stood at $22.33 million. Investors who were betting on a bullish rally for Dogecoin suffered a huge loss when the price failed to climb as they anticipated.
However, the sharp drop in price has caught long-position traders off guard, as they faced a sell-off following the declining value of DOGE.
Short position traders recorded minimal losses as they were less exposed. Those betting short on Dogecoin only lost $625,930.
Although Dogecoin mirrored Bitcoin in liquidation imbalance, DOGE recorded a higher level of decline in the price metric.
As of press time, the Dogecoin price was changing hands at $0.2049, representing an 8.3% decline in the last 24 hours. Comparatively, Bitcoin’s drop in price is 2.59% within the same time frame.
Despite the considerable drop in price and liquidation in the Dogecoin ecosystem, traders are actively transacting. The trading volume has climbed by 53.33% to $2.16 billion. This suggests that DOGE bulls might be taking advantage of the declining price to accumulate the meme coin.
Could Bitcoin momentum reverse Dogecoin’s decline?
Amid broader market fluctuations, Dogecoin might continue to lose its gains and breach several support levels. If this bearish sentiment lingers, it could threaten the critical $0.20 support level and drive prices down.
However, Dogecoin might stabilize and rebound if the market records a boost. Notably, Dogecoin investors might keep an eye on Bitcoin, which DOGE tends to align with in price movements.
For Dogecoin to witness a sustained reversal, ecosystem bulls must trigger a substantial buying volume that could translate to a price surge.
Vladislav Sopov
U.Today Editorial Team