Data shows that Dogecoin futures liquidations have been the highest in the sector during the past day as the coin has continued its upward push.
Dogecoin Liquidations Spike, Majority Are Short Contracts
The last few days have been great for DOGE holders as the memecoin has finally showed some promising potential toward the upside, after what had been a rather extended period of stagnation.
During this latest surge, some interesting positive signs have appeared for the asset, with perhaps the most significant of them being the cryptic hints related to possible Dogecoin integration on Twitter that Elon Musk has provided recently.
DOGE has enjoyed a sharp rise over the last few days | Source: DOGEUSD on TradingView
Dogecoin has been one of the best performers in the market recently, and the cryptocurrency’s momentum may not be fading just yet, as its trading volume has also registered a spike toward 16 week highs recently, implying that investors at large currently have an active interest in the memecoin.
DOGE has naturally continued to show volatility in the past day as well, as it’s currently up north of 2% in the period. Generally, with volatility comes chaos on the futures market, as high leveraged positions dip into losses so deep that their platforms are forced to close the contracts down, or to “liquidate” them.
The DOGE futures market has seen a beating today | Source: CoinGlass
The above data shows the USD value of liquidations during the past 24 hours for each of the symbols in the cryptocurrency futures market. It would appear that Dogecoin liquidations have been the highest in the sector at about $7.19 million, ahead of Bitcoin’s $5.91 million.
As the memecoin has observed a net increase in the past day, the majority of the liquidations have involved the short contract holders. In total, $4.24 million such contracts have been flushed down the drain.
The reason the top players such as Bitcoin and Ethereum have observed relatively low liquidations (in the context of their sizes) has been the fact that their prices have been unusually stale recently.
These high liquidations are a result of speculators concentrating on the market after being attracted by the sharp price surge. In rallies like these, many such users might get too swayed in the hype and opt for extreme amounts of leverage, but while leverage can potentially multiply their profits by many factors, it’s also true that it can significantly raise the risk of liquidation.
Because of this reason, the futures market can be especially dangerous to navigate for the uninformed trader during periods of high volatility such as now, where liquidation is a very real possibility.
In terms of where Dogecoin stands amongst its peers in the wider cryptocurrency space currently, the market cap ranking can come in use:
Looks like DOGE has a market of $11 billion at the moment | Source: CoinMarketCap
Due to its strong performance relative to the other assets, Dogecoin has recently become the seventh largest asset in the sector in terms of total valuation, ahead of the likes of Cardano (ADA) and Solana (SOL).
At present, the memecoin is trading around $0.0788 and is up 14% within the past week.
Featured image from iStock.com, chart from TradingView.com
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