Dogecoin’s 14% rally causes traders to lose nearly $12 million in a few hours; understand

Dogecoin (DOGE) traders lost nearly $12 million in liquidations that took place in the early morning hours of Friday (14) after the coin meme rose 14% in the last 24 hours. The numbers were much higher than liquidations of Bitcoin (BTC) or Ethereum (ETH) futures, which generally have the biggest losses among all cryptocurrencies.

Settlements happen when an exchange closes a trader’s leveraged position as a safety mechanism to avoid a partial or total loss of initial margin. This is mostly true in futures trading, which only tracks asset prices, as opposed to spot trading, where traders hold the actual assets.

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Almost 65% of liquidations resulted from short selling (a strategy that bets on the asset’s fall), representing US$ 7.66 million in losses. Leveraged traders who bet on an edge lost another $4 million in margin calls.

Data from analytics tool Coinglass showed that 60.81 million units of Dogecoin were liquidated on various cryptocurrency exchanges. Futures products tracking the meme coin on exchange OKEx had $7.71 million in liquidations, while similar products on exchange Binance had $2.75 million in liquidations.

The price of the cryptocurrency soared on Friday after announcing that electric car maker Tesla would accept DOGE as a form of payment for some products. Tesla fans can now buy belt buckles, whistles, chargers and an ATV using the cryptocurrency-meme at the official store.

Tesla CEO Elon Musk is a key supporter of Dogecoin, and he sided with the cryptocurrency even when its creators abandoned the project in 2015. In a May 2021 tweet, Musk claimed he was working with Dogecoin developers. to improve system efficiency.

In December, the Dogecoin Foundation, a non-profit that oversees developments on the network, presented a roadmap for turning the meme coin into a more technical project. It was the first roadmap in Dogecoin’s eight-year history, and explored eight new projects, including the launch of LibDogecoin and GigaWallet implementations.

Dogecoin was traded at $0.20 in the early hours of Friday, up 25% from the $0.16 price seen late on Thursday (13). At the time of writing, however, the digital asset has taken a slight dip, and is priced at $0.19.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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