Dogecoin, which was seen to have a market capitalization of $10 billion and a value increase of more than 90% in the previous week, propelled it to the top of the list of liquidators, and a seasoned trader claimed that the bear market for dogecoin, which started in May 2021, has ended this year.
News in a Glimpse:
- Since last Friday, Dogecoin has experienced over $89 million in liquidations due to choppy trading after Elon Musk bought Twitter.
- Over $27 million worth of Dogecoin was purportedly liquidated in the last day, making it the most of any cryptocurrency.
- These liquidations were observed to have a knock-on effect on the price of Dogecoin, which was observed to have increased by twofold last Sunday.
- The seasoned trader tweeted a DOGE chart and asserted that the bear market for the meme coin was ended by an upside violation of the bear channel.
- Several users argued that the chart showed a false breakout in response to his tweet, which sparked a discussion.
- Many users think that “the Elon effect” is what caused the recent DOGE pump.
Over the weekend, the famous Shiba Inu-themed meme coin, Dogecoin, was seen to have reached a market capitalization of $10 billion. This adds more than 90% to its value in the last week, propelling it to the top of the liquidators list among futures that track crypto majors.
According to Peter Brandt, a veteran trader, the dogecoin bear market, which began in May of 2021, has ended this year. This comment surfaced on the internet after the price of Dogecoin skyrocketed following Elon Musk’s acquisition of the social media platform Twitter.
Dogecoin Racks Up
Dogecoin has seen over $89 million in liquidations since last Friday, October 28th, in the midst of volatile trading following Elon Musk’s confirmation of his purchase of Twitter. Short traders, or bets against a token’s price rise, are said to have contributed more than half of the total.
Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss in the trader’s respective initial margin. This usually occurs when the trader does not have or maintain the necessary funds to keep the trade open. It can also occur when the trader fails to meet the margin requirements for a leveraged position.
Dogecoin liquidations were reportedly the highest among all cryptocurrencies in the last 24 hours, totaling more than $27 million. Famous cryptocurrencies such as ether and Bitcoin were seen to incur losses of less than $14 million and $12 million, respectively.
The effect of these liquidations was seen to have a reflexive effect on the Dogecoin price, which was only seven cents on Friday and was observed to have doubled by Sunday at fifteen cents, but this did not last long. The following day, on Monday, the price was seen to have dropped to eleven cents.
According to the report, as of Monday, there was $647 billion in open interest on dogecoin futures. Open interest is the number of contracts outstanding that have not yet been liquidated by an offsetting trade. According to some data, on-chain transactions on the Dogecoin system have also increased, from 25,000 per day last week to 37,000 as of Monday morning. Elon Musk, a major supporter of DOGE, was seen to still have an impact on the meme coin, as his statements continue to influence its price.
The Veteran Trader’s Outlook on the Memecoin
Last Sunday, October 30, Peter Brandt, a veteran trader in futures and FX since 1975, shared his analysis of the meme coin Dogecoin. The seasoned trader is also a chartist and the author of the Factor Report. He is known to trade in a variety of markets such as Dow futures, bonds, corn, crude oil, European wheat, Osaka Dow, US dollar, and sugar.
The veteran trader tweeted a DOGE chart and claimed that the upside violation of the bear channel ended the meme coin’s bear market, which reportedly began at the May 2021 high. He then issued another tweet to traders, reminding them that the end of the bear market does not guarantee the start of the bull market.
He stated that a common mistake made by novice and aspiring traders is assuming that the end of a market’s bear phase means that a bull market has begun, and that this assumption is frequently incorrect.
His tweet sparked a debate among several users, who claimed that the chart was a false breakout. Furthermore, the aforementioned subsequent period of consolidation may be a determinant of where the price of dogecoin is actually headed.
Although many users believe that the recent DOGE pump is the result of “the Elon effect,” following news of Tesla CEO Elon Musk’s acquisition of the social media platform Twitter. This was backed up by data showing that the price of dogecoin skyrocketed after Musk purchased Twitter.
The billionaire, Tesla owner, and Twitter CEO known as the Dogefather recently acquired Twitter; he has been known for his support of the meme coin, which usually results in a price increase. Musk proudly stated in June of this year that he will continue to buy and support DOGE, and that the meme coin has currency potential. Despite his open support for DOGE, he reportedly also owns Bitcoin and Ether in addition to DOGE.
Musk’s electric car company, Tesla, is known to accept meme cryptocurrency for some merchandise, while his Boring Company accepts DOGE for some of its rides. Many users in the crypto community believe that the billionaire will use DOGE in his efforts to improve Twitter. This is supported by his comment on Mark Cuban’s idea to use DOGE to solve Twitter’s spam problems back in May, which he labeled as “not a bad idea.”