- Liquidation data showed that long positions were the hardest hit, amounting to millions of dollars, while short positions were liquidated for less than $60,000.
- Dogecoin’s network activity is growing faster than its price, indicating a potential buying opportunity.
Traders with open Dogecoin [DOGE] The deal had to go through a number of issues between June 3 and the early morning of the 4th, as the total liquidation amount exceeded $5 million.
Of these, long positions Accounted for It sold for $5.38 million, while short sellers, who bet on a fall in price, liquidated less than $60,000.
On the other hand, longs are those who use leverage to predict a rise in prices.
The longs have been liquidated, but the shorts may be next.
Liquidation occurs when an exchange forcibly closes a trader’s position.
This could be due to high market volatility, insufficient margin balances, or excessive use of leverage when the market is moving against you.
Source: Coinglass
In Dogecoin’s case, the culprit was the price fluctuation of the memecoin. At the time of writing, DOGE was trading at $0.10, a decrease of 7.28% in the past 24 hours.
However, the decline was in line with what was happening across the market.
But will the coin price continue to fall or is a moment of relief on the horizon? To find out, AMBCrypto evaluated the liquidation heatmap.
Simply put, a liquidation heatmap shows the price levels where large scale liquidations are likely to occur.
If liquidity is high in an area, the price is likely to move towards that point. Hence, liquidation heat maps can measure directional movements while identifying support and resistance zones.
At the time of writing, using Hyblock data, Observed Liquidity was concentrated around the $0.12 level, so if buying pressure increases, DOGE price could move in that direction.
Source: Hiblock
The opportunity to buy has arrived
However, this prediction may be invalidated if selling pressure continues to dominate the market. Despite the drawdown, the divergence between price and DAA indicates that it may be time to start accumulating DOGE.
DAA stands for Daily Active Addresses. When combined with price, it compares the rate of price growth to activity on the blockchain. If the price rises above the DAA, it is a sell signal.
In most of these cases, the ratio of price to DAA is extremely positive. At the time of writing, this indicator was -58.32%.
This interpretation is that participation in the Dogecoin network Grow faster higher than the coin price. If this situation continues, DOGE will be a buying opportunity.
Source: Santiment
Is Your Portfolio in the Green? Check out the DOGE Profit Calculator
Going forward, the coin’s price is likely to stabilize around the $0.10 mark, however, market participants may start buying up the coin in the coming weeks.
If this happens, DOGE may begin to move slowly towards $0.12 as mentioned above.
