Dogecoin, WIF, and Other Memecoins Crash Amid $1.7 Billion Crypto Liquidations

Dogecoin, WIF, and Other Memecoins Crash Amid $1.7 Billion Crypto Liquidations


 Dogecoin, WIF, and Other Memecoins Crash Amid $1.7 Billion Crypto Liquidations

The cryptocurrency market witnessed a sharp decline on Dec. 10, with memecoins suffering the heaviest losses. Dogecoin (DOGE), Shiba Inu (SHIB), and Dogwifhat (WIF) led the downturn, wiping out gains from the recent Donald Trump-fueled rally just weeks ago.

Memecoin market capitalization and daily trading volume. Source: CoinMarketCap


Memecoin Market Faces Major Blow

The total market capitalization of the memecoin sector dropped to a three-week low of $119.6 billion, marking a 21% decrease in just 24 hours. This represents the largest decline since Nov. 27, when the market cap stood at $118 billion.

Adding to the volatility, trading volumes in the memecoin sector nearly doubled, reflecting significant selling pressure. Dogecoin, the largest memecoin by market capitalization, saw its price drop 5.6%, while SHIB recorded a steeper 10.4% decline. On the contrary, Ethereum-based Pepe (PEPE) stood out with a 1.7% gain, bucking the broader market trend.

Top memecoins’ price performance. Source: CoinMarketCap


Open Interest (OI) Signals Bearish Momentum

The crash was preceded by a sharp drop in open interest (OI) for memecoins. Pnut (PNUT) saw a 30% decline in OI, while DOGE and WIF recorded decreases of 20% and 27%, respectively.

Open interest measures the total number of unsettled derivative contracts. The drop in OI indicates bearish sentiment as leveraged traders closed positions in anticipation of further price drops.

DOGE’s OI fell to $3.1 billion, significantly overshadowing WIF’s $519 million. PEPE’s OI also declined, standing at $302.4 million, down 11%.

Memecoin OI chart. Source: CoinGlass


Massive Liquidations Rock the Market

The crypto market experienced over $1.7 billion in liquidations within the past 24 hours, marking the largest liquidation event since 2021. Over $1.3 billion of these liquidations occurred within just 12 hours, driven by long positions in smaller altcoins and memecoins.

DOGE accounted for $72.6 million in liquidations, while SHIB saw $22.35 million wiped out. Additionally, $7.9 million in PEPE longs and $3.6 million in WIF longs were liquidated during the same period.

Broader Market Impact

The crash echoes previous liquidation events, such as the Dec. 5 flash crash, which saw over $816 million in longs wiped out. During that event, Bitcoin (BTC) dropped 11% to $92,000, triggering a broader altcoin sell-off.

The recent downturn serves as a reminder of the volatility in the crypto market, particularly in speculative assets like memecoins. As investors brace for further market turbulence, caution remains key in navigating the ever-changing cryptocurrency landscape.


cointelegraph


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