The broader crypto market extended its bearish streak. As a result, Dogecoin weakened further, breached the $0.09 support, and fell to $0.081.
The memecoin last reached such low levels during the February market dip. At press time, Dogecoin traded at $0.085, down 5.3% on the daily charts, adding to its 12% weekly slip.
The price slip triggered the massive liquidation of leveraged positions. Dogecoin [$DOGE] saw a total of $6.4 million in positions liquidated, with $5.3 million in longs liquidated.
The liquidation of leveraged longs to such levels causes exchanges to close positions and cut losses. As a result, the market sees additional selling pressure, causing further market slip.
Dogecoin Futures panic close amid liquidation risk
Driven by a surge in liquidations, traders in the Futures market panicked and hurriedly closed their positions.
According to CoinGlass data, Dogecoin saw $755 million in Futures Outflows while only $696 million in inflows. As a result, Futures Netflow dropped to -$58.9 million.
A negative Futures Netflow suggests that sellers dominated the market, as they closed positions. The memecoin’s Open Interest fell to $1.02 billion, the lowest level since March, further confirming this shift in bearish sentiment.
Dip buyers jump on the Spot
Interestingly, while leverage got flushed and Futures panic exited, the market dip created a buying opportunity. As such, on the Spot market, buyers returned to accumulate at a discount.
As a result, Spot Netflow extended its bullish outlook, holding negative for four consecutive days. At press time, Netflow was -$16.59 million, a slight drop from -$18.1 million the previous day.
A Negative Netflow indicated that buyers dominated exchanges and continued to accumulate at lower price levels. Often, when Spot buyers jump in, they present the market with a fighting chance by absorbing pressure from Futures.
What’s next for the memecoin?
Dogecoin’s downward momentum intensified after leveraged longs were liquidated. Succeeding selling pressure caused further market weakness.
As a result, the memecoin’s Relative Strength Index (RSI) dropped into the oversold zone, touching a low of 24. RSI at these levels suggested that sellers have total control of the market.
As such, even dip buyers in the Spot market remain insufficient to absorb the prevailing market pressure. Under such conditions, $DOGE is at risk of more losses.
If the prevailing sentiment persists, Dogecoin is likely to make more losses on its price charts and breach the $0.08 support level.
However, if Futures panic cools off amid the dip-buying witnessed, the market will cool down and revisit $0.094, then eye $0.1.
Final Summary
- Dogecoin dropped 5%, hitting a four-month low of $0.081, amid intense bearish pressure.
- The Spot market saw renewed demand as dip buyers returned to accumulate at lower price levels, but the market remains overly bearish.
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