Over the last 24 hours, Dogecoin [DOGE] has witnessed a significant 17.64% drop in market value, leading to a monthly decline of 36.43%. This downward trend indicates a continuous series of lower market lows for DOGE.
Analysis indicates that large investors, or whales, played a crucial role in the recent market downturn of DOGE. Consequently, retail traders have now also turned pessimistic, potentially exacerbating the downward spiral.
Impact of Whales’ Asset Liquidation
Whales, holding sizable amounts of DOGE ranging from 100 million to over 1 billion, have offloaded 270 million DOGE in the past day. This massive sell-off has led to a drop in prices and overall market losses.
Typically, such significant sell-offs suggest that these major investors are aiming to cash in profits, break even, or limit their losses.
Following these whale-driven sales, a series of downward price movements usually occur until a notable surge in buying activity is observed.
The implications of these whale transactions have also affected other market participants, prompting them to close their bullish contracts as the bearish trend gains momentum.
Bearish Outlook in Derivative Trades
The positions of derivative traders have shifted towards a bearish stance as crucial metrics like Funding Rate and Open Interest have turned negative.
The Funding Rate, which determines the control between buyers and sellers based on who pays the premium to maintain spot and Futures market balance, currently reflects seller dominance.
The negative Funding Rate, presently at -0.0245% for DOGE, implies that sellers are prevailing in perpetual contracts.
Similarly, Open Interest (OI), measuring unsettled derivative contracts, has decreased by 30.08% to $2.53 billion. This drop suggests that derivative traders are closing positions, leading to liquidity outflows and increased downward pressure.
Dogecoin Bulls Face Losses
Bullish traders have suffered significant losses in the recent 24-hour period due to the prevailing bearish trend. Market liquidation data opposed any potential rallies as traders remained bearish across all timeframes.
Within the last hour alone, $2.31 million of long liquidation positions were closed, in contrast to $99,880 of short positions.
The substantial gap between long and short contracts in shorter timeframes underscores the depth of the bearish trend.
Overall, the bearish trend continues, with approximately $69.46 million worth of long DOGE positions closed, while short positions stand at $18.94 million.
If this downward trajectory persists, there is a high likelihood that DOGE will continue to establish new record lows, resulting in further market losses.