Surprising the masses, the satirical cryptocurrency Dogecoin (DOGE) surged 5% early on Monday, seemingly unaffected by the general market turbulence. Notably, this anomalous rise occurred amid the apprehensive climate surrounding Bitcoin (BTC), which dwindled below the $29,100 mark during Europe’s morning trade hours.
The key here is the interesting development with Twitter, owned by renowned tech entrepreneur Elon Musk. The social media magnate is recasting Twitter into X, nestled under his artificial intelligence-centric corporate family, X.AI. Triggering further speculation, Musk interacted with dogecoin’s ticker logo on his Twitter page early Monday, hinting towards a more significant role for this memecoin.
However, while Dogecoin soared, the crypto space faced an ominous tremor as BTC-tracked futures saw some $30 million worth of longs – constituting a staggering 96% of levered futures positions – liquidated within an hour. Liquidation can impose a chilling effect on markets – the enforced closure of a trader’s leveraged stance due to a comprehensive or fractional loss of their initial margin. This occurs when traders fail to fulfill the margin demands for a leverage position or can’t maintain enough funds to keep the trade alive. Large-scale liquidations often symbolize the peak or nadir of a price swing, setting parameters for traders to strategize.
While Dogecoin basked in the glory of its rise, major tokens like Tron’s TRX, Polygon’s MATIC, and Solana’s SOL tumbled between 3.4% to nearly 5% with bitcoin’s descent, proving once again the influence of the world’s leading cryptocurrency.
Market analysts have voiced concerns over the lack of bullish catalysts that might hamper bitcoin prices, with pessimistic guesses placing BTC around the $27,000 mark. According to Alex Kuptsikevich, FxPro senior market analyst, if bearish pressure escalates, we could see bitcoin retract to the $27,000 level, the lower boundary of the ascendant run since November.
Corroborating this outlook, Simons Peters, a seasoned market analyst at eToro, stated the ever-dwindling bitcoin prices point towards a consistent fallback. However, he also noted that comparisons must take into account the volatile summer market conditions and current placid demeanor across top cryptoassets. In the absence of encouraging buzz, crypto enthusiasts and investors may be forced to adopt a more ‘wait and see’ approach.
Source: Coindesk
