For some time, predictions have been going around that Dogecoin (DOGE) would reach $1. Unfortunately, the optimism around this prediction has taken a major hit as on-chain data assesses the widespread reaction to recent events and the potential of meme coins.
On June 17, DOGE continued its broad market decline, losing 9.82% of its value in the last 24 hours. However, traders with open contracts in the market were also affected.
Large losses cause traders to change positions
According to Coinglass, from June 17th to 18th, DOGE liquidation totaled $60.27 million. The liquidation value on Monday was $44.21 million, and as of this writing, the liquidation value is $16.06 million.
Forced liquidation occurs when an exchange forces a trader to liquidate his or her position to prevent further losses. This may be due to insufficient margin balance to maintain the position or extreme market volatility in a price direction that goes against your bet.
In addition to the liquidation value, most of the positions affected appear to be long positions. A long position is a trader who bets on a rise in the price of a cryptocurrency. On the other hand, short is a position that predicts a price decline.
The total liquidation of Dogecoin buy positions is $59.84 million, and sell positions are $633,910. After the capitulation, traders continue to overlook bullish positions in favor of bearish positions.
The long/short ratio, which reflects the sentiment of market traders, bears witness to this sentiment. This indicator is the number of long positions divided by the number of short positions.
A reading of this indicator above 1 means that traders have optimistic expectations about cryptocurrencies. Conversely, if it is less than 1, it means that traders' expectations are, on average, bleak. Over the past hour, DOGE's long/short ratio stood at 0.82 at press time.
Read more: Dogecoin (DOGE) vs Shibainu (SHIB ): What's the difference?
Dogecoin Price Prediction: Price Rebalancing Begins
Now let’s take a look at the price potential of the coin. BeInCrypto analyzes Dogecoin trading volume and realized cap from an on-chain perspective.
Trading volume represents the total value of a coin over a specific period of time. But in addition to measuring interest, this indicator can also give you an idea of where the price is headed next. If volume increases along with price rises, the value may increase.
If volume is decreasing while price is rising, it means that most participants are selling. When this happens, the uptrend weakens and prices slowly fall. For DOGE, trading volume rose to over $1 billion, but the price continued to fall.
If this trend continues, volume could continue to reinforce DOGE's decline. According to the price target, Memcoin could fall to $0.10 in very bearish conditions. Realization caps also support this move.
Market capitalization is the total amount of capital flowing into a cryptocurrency minus the capital flowing out as losses. A steep rise in this indicator means investors are accumulating cheap coins. This is a signal foreshadowing a future price rise.
Read more: How to Buy Dogecoin (DOGE) eToro: The Complete Guide
However, Dogecoin's daily realization limit fell to $59.49 million. This means that the value of the coin is being re-evaluated as transactions increase. Therefore, the impact on Dogecoin price could be a prolonged decline, bottoming out between $0.10 and $0.12.
To invalidate this prediction, DOGE would need to be the first to move when the market rebounds . This may be possible with the support of other meme coins. For example, meme coins outperformed other market categories during the March rally. If this happens again, Dogecoin could rise to $0.15.
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