Dogecoin’s daily gains reach the top as it bounces back from $523M loss, but analysts warn of potential fade.
Dogecoin has emerged as the daily gainer among cryptocurrencies following a significant flush in the market of $523 million, which led to the liquidation of both long and short positions. This resurgence in the crypto market comes as the reinvestment of capital into higher-risk assets appears to be underway.
Analysts have noted that while Dogecoin is leading the market gains, this rebound may be fleeting due to the heavy weight Bitcoin continues to exert on the market sentiment. Despite the optimistic recovery, sentiments around memecoins like Dogecoin lack a clear catalyst for sustained growth.
In the wake of the forced deleveraging that saw a total liquidation of $523.43 million, the global cryptocurrency market capitalization rose to $2.71 trillion. The market saw various sectors experiencing growth, with decentralized finance (DeFi) leading the charge with a 3.53% increase, followed by meme tokens, Layer 2, centralized finance (CeFi), and Layer 1 up by varying percentages. However, non-fungible tokens (NFTs) and gaming finance (GameFi) sectors continued to see losses.
Dogecoin, trading at $0.1059 after a 4.03% gain, underwent liquidations worth $3.90 million over a 24-hour period. Despite this recovery, market analysts like Fadil Crypto have pointed out that Dogecoin remains in a bearish market structure as sellers still dominate the market. Fadil Crypto suggests waiting for a rebound into what he calls a “grey box” supply zone before considering any long positions on Dogecoin.
Fadil Crypto further highlights the interdependence of Dogecoin on Bitcoin’s market direction, indicating that meme coins, including Dogecoin, should not be longed given Bitcoin’s current bearish outlook. Bitcoin, trading at $77,818, saw $168.24 million in leveraged positions liquidated over the same period, with improved market sentiment transitioning from being extremely bearish to only bearish around the digital asset.
Other major cryptocurrencies such as Ethereum, Solana, XRP, and BNB also witnessed gains despite experiencing varying degrees of liquidations in leveraged positions. Ethereum traded at $2,33.8, up 5% over 24 hours, with $191.72 million in total liquidations. Solana traded at $104.24, marking a 4.1% increase, with $19.85 million in leveraged positions liquidated. XRP saw a 2.1% gain, trading at $1.61, with approximately $6.80 million in liquidations. BNB traded at $773.80, gaining 2.6% over 24 hours, with liquidations amounting to approximately $2.88 million.
Overall, the crypto market rebounded following the significant deleveraging event, with Dogecoin leading in daily gains. However, analysts caution that this resurgence may only be temporary, as the market remains heavily influenced by Bitcoin’s dominant position and the lack of clear catalysts for meme coins like Dogecoin to sustain their growth.
