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- Dogecoin liquidation intensified with over $11 million lost amid a sustained market drawdown.
- With the erratic market, the DOGE buy-in level of $0.12 is hard to spot, so a promising window may open.
Dogecoin (DOGE), a well-known memecoin in the crypto space, has not been spared from the current crypto market downturn. Recent data shows an increase in Dogecoin liquidations as the price hits $0.10, leaving investors wondering if they should buy the dip.
Spike in Dogecoin Liquidations
According to data from Coinglass, Dogecoin liquidations have soared by over 98% to $11.15 million in the last 24 hours. From this figure, long positions accounted for $10.07 million, while short liquidations were $1.08 million.
In the digital ecosystem, a long position entails purchasing a cryptocurrency with the expectation that its value will rise over time. On the other hand, going short means selling a cryptocurrency, typically one that was borrowed in anticipation of a price reduction. The ultimate aim is to buy back the asset at a cheaper cost and profit from price drops.
The recent surge in Dogecoin liquidations can be attributed to the downward movement of the memecoin. As of this writing, DOGE’s price decreased by 13.6% in the past day to trade at $0.10, with a market cap of $14.2 billion. As previously reported by Crypto News Flash, Toincoin (TON) has overtaken DOGE to become the 8th largest crypto by market capitalization.
Analyzing the liquidation heatmap, a tool that identifies areas where large-scale liquidations might occur, reveals a concentration of liquidity around $0.12. This indicates that if buying pressure picks up, the price of DOGE could rise towards this level. However, if selling continues to dominate, this prediction could be nullified.
Despite Dogecoin’s recent price decline, a divergence between price and Daily Active Addresses (DAA) paints a potentially bullish picture. DAA is a metric that tracks the number of unique addresses interacting with the Dogecoin blockchain.
Typically, when the price increases more than DAA, it is a sell signal. However, in this case, the DAA metric is negative -58.32%, indicating that network activity is growing faster than the memecoin’s price. This could suggest that DOGE is undervalued relative to its on-chain activity.
Should Investors Buy the Dip?
Several factors must be considered to determine if this is the right time to buy the dip. In the short term, DOGE may consolidate around the $0.10 mark. However, a shift in sentiment could see market participants start accumulating the coin, potentially pushing the price back towards the $0.12 support zone.
To those who believe in the memecoin’s potential, this could be the right time to start accumulating DOGE. Despite the recent liquidations, the 24-hour trading volume for DOGE increased by 62% to $1.6 billion, indicating renewed investor sentiments.
According to a prior report by Crypto News Flash, analysts claim DOGE is inching towards the $2 price territory. Their prediction is based on the memecoin’s previous performance. While these bullish sentiments portend well for DOGE, investors should carefully monitor network activity and price movements before investing.
