10/30/2022 | CoinDesk
Dogecoin Futures Rack Up Nearly $90M in Liquidations Over Weekend in Unusual Move
Dogecoin trading over the weekend saw the shiba inu-themed meme coin reach a market capitalization of over $10 billion, add over 90% in value over the past week and become one of the largest liquidators among futures that track crypto majors.
Dogecoin futures racked up over $89 million in liquidations since Friday amid volatile trading as Elon Musk's purchase of Twitter was confirmed. Some $52 million of those figures originated from short traders, or bets against a token’s price rise.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Dogecoin liquidations were the highest among all cryptocurrencies in the past 24 hours at over $27 million. Futures tracking ether and bitcoin, which usually see the largest figures, racked up a relatively lesser $14 million and $12 million in losses respectively.
The liquidations may have contributed to a short squeeze, as dogecoin prices doubled from nearly 7 cents on Friday to over 15 cents on Sunday morning. Prices retreated to 11 cents on Monday at writing time.
There’s some $647 billion of open interest on dogecoin futures as of Monday. Open interest, or the number of contracts outstanding and not yet liquidated by an offsetting trade.
Elsewhere, on-chain transactions on the Dogecoin system spiked from 25,000 per day last week to over 37,000 as of Monday morning, data from block explorers show.
Musk has been a major supporter of DOGE, which has become a proxy for sentiment about him. The entrepreneur's statements about the token have also consistently influenced its price, as previously reported.