Dogecoin traders panic sell – DOGE dips below $0.1, liquidations reach $16 mln

With the crypto market on its back foot, Dogecoin [DOGE] failed to hold $0.1 support and dropped to a monthly low of $0.0997. The memecoin has held above $0.1 since late April, suggesting a major shift in market direction.

As of this writing, Dogecoin traded at $0.099, down 5.84% on the daily charts. Despite the drop, the memecoin’s market cap rose 3.5%, and trading volume rose 47%, suggesting increased market activity. 

Dogecoin liquidation hit $16 million

As DOGE traded above $0.1, traders were extremely bullish, driving market leverage to relatively high levels. After the market dropped below these levels, investors holding these positions were forced out. 

According to CoinGlass data, $16.4 million worth of long positions were liquidated. Such high levels of liquidation suggest that many traders were bullish and used leverage. 

Often, rising liquidations lead to panic selling, as traders close their positions to avoid the same fate. In fact, Futures Outflow surged to $811 million, while inflows dropped to $712 million. 

As a result, the memecoin’s Futures Netflow dropped 484% to -$99 million, a clear sign of aggressive Futures selling. 

Traditionally, Futures panic selling has led to a cascade of liquidations, thus causing further market weakness. 

Meanwhile, appetite for long positions has significantly increased, with the overall Long/Short Ratio dropping to 0.85. However, this metric on OKX and Binance remained elevated, holding above 2.0, with OKX recording 3.7. 

This suggests that traders on OKX and Binance are still bullish and expect prices to rebound. However, this poses another liquidation risk: if prices continue to decline, more longs will be liquidated, causing a greater price drop.

Can DOGE defend the $0.1 level, or is a bigger drop ahead?

Dogecoin lost its $0.1 support as Futures traders panicked and exited. With sentiment turning risk-off and appetite reduced, the market structure weakened significantly.

As a result, the memecoin’s Connors RSI dropped further into the bearish zone, reaching 19, indicating heavy selling pressure. Likewise, the memecoin’s True Strength Index (TSI) dropped into the negative zone, further confirming the trend’s strength.

These two indicators suggest that bears are extremely dominant and that the downtrend is strong, leaving DOGE exposed to further losses. If bearish pressure persists, Dogecoin is likely to see further losses, dropping to $0.096.

To see a trend reversal, DOGE bulls need to push for a daily close above $0.106.

Final Summary

• DOGE dropped 5%, breaching $0.1 support, hitting a monthly low of $0.099. 
• Dogecoin saw over $16 million in longs liquidated, weakening the market as investors panicked and exited.