Home DeFi & NFT Dogecoin Faces 17% Drop as Whale Sell-offs Drive Bearish Trend

Dogecoin Faces 17% Drop as Whale Sell-offs Drive Bearish Trend

Dogecoin Drop

Dogecoin (DOGE) has experienced a sharp decline of 17.64%, a major blow to the asset’s market performance. This dramatic fall has compounded its monthly losses, which now stand at 36.43%. The price of DOGE is on a clear downward trajectory, marking a series of lower lows, which points toward growing bearish sentiment across the market.

Whale Activity Drives Market Downward

A significant factor contributing to Dogecoin’s drop is the large sell-offs by whales—high-net-worth investors holding significant amounts of DOGE. Over the past 24 hours, these whales offloaded a total of 270 million DOGE, creating downward pressure on the price. Whales typically engage in such large-scale sales to lock in profits, mitigate losses, or react to unfavorable market conditions.

This large-scale liquidation has exacerbated the selling pressure across the market, fueling further declines as smaller retail investors follow the actions of the whales. The result is a broader sentiment shift that has led many traders to liquidate long positions, contributing to the ongoing price drop.

Derivatives Market Reflects Bearish Sentiment

The bearish trend is not limited to the spot market, as indicators from the derivatives market show signs of increased pessimism as well. The Funding Rate, which tracks the balance between longs and shorts in futures contracts, has shifted into negative territory. As of the latest data, DOGE’s Funding Rate is sitting at -0.0245%, suggesting that sellers are now in control of the market. When this rate is negative, it means that short traders are paying a premium to long traders, further signaling a dominance of bearish sentiment.

The Open Interest (OI) metric, which reflects the volume of unsettled derivative contracts, has also seen a sharp decline. OI for DOGE has fallen by 30.08%, down to $2.53 billion. This substantial drop indicates that traders are closing their positions and withdrawing liquidity, adding more downward momentum to the market.

Liquidation of Long Positions Escalates

The bearish environment has caused significant losses for long traders. In the past 24 hours alone, $2.31 million worth of long positions have been liquidated, a stark contrast to just $99,880 in short positions. This disparity highlights the severity of the current downward trend, with more traders being forced out of their long positions as the price of DOGE continues to fall. Over the last 24 hours, a total of $69.46 million worth of long positions were closed, further underscoring the widespread bearish sentiment.

The liquidation of long positions could lead to a cascading effect, as the price continues to dip and triggers more stop-loss orders, exacerbating the downward pressure.

Outlook for Dogecoin: Continued Bearish Trend

Currently, Dogecoin finds itself in the midst of a sustained bearish cycle. The actions of whales and the broad sentiment shift in the market suggest that the cryptocurrency may continue to experience declines in the near term. While the market remains volatile and unpredictable, traders will need to closely monitor for any signs of reversal, such as an uptick in buying volume or a shift in derivative metrics.

As it stands, the absence of buying pressure and the continuation of large-scale sell-offs suggest that DOGE could hit new lows in the coming days or weeks. Until significant bullish catalysts emerge, the bearish outlook for Dogecoin appears to be firmly entrenched, with little immediate relief in sight. Traders and investors will need to remain cautious and monitor for any changes in market dynamics that could signal a shift in sentiment.

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Pankaj K

Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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