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Crypto Market Faces Over $400 Million in Liquidations Amid Token Decline

In the past 24 hours, over $400 million in crypto long positions have been liquidated as major tokens experienced a sharp decline of up to 10%.

Dogecoin Futures Hit Harder Than Bitcoin

Bullish bets on dogecoin (DOGE) futures suffered more severely than those on bitcoin (BTC) on Monday. The dog-themed meme token saw $60 million in long trades liquidated as its price dropped more than 10%, though it briefly recovered during a broader market sell-off in Asian trading hours.

Liquidations Across Major Tokens

Bitcoin long bets faced $47 million in losses, while ether (ETH) bullish positions lost the most at $76 million. Overall, crypto longs saw liquidations surpass $440 million due to profit-taking and a stronger dollar, traders reported on Tuesday.

DOGE Liquidation Details

According to Coinanalyze data, almost all DOGE liquidation activity in the past 24 hours came from long positions, with only about $600,000 worth of short positions being liquidated. These figures represent the highest DOGE futures liquidations since May 2021, with over $44 million of the liquidations occurring on Huobi, a crypto exchange favored by Asia-based traders.

Open interest, or the number of unsettled futures bets, has decreased by 16% to $600 million. Additionally, a long-short ratio tracking DOGE futures shows traders are anticipating further declines, with the ratio at 0.94, indicating a bearish sentiment.

Understanding Liquidations

Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they do not have sufficient funds to keep the trade open.

Conclusion

The recent wave of liquidations highlights the volatility and risks associated with leveraged trading in the cryptocurrency market, especially during periods of significant market shifts and broader economic changes.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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