Dogecoin, WIF and other memecoins fall heavily among $1.7B crypto liquidations
Memecoins such as Dogecoin (DOGE), Shiba Inu (SHIB) and Dogwifhat (WIF) were among the best-performing cryptocurrencies on December 10, erasing a significant portion of the rally fueled by Donald Trump a few weeks ago.
The Memecoin market cap has a huge hit.
The latest memecoin price drop saw the sector's total market capitalization hit a three-week low of $119.6 billion since December 10.
RELATED: Bitcoin Sees Most Liquidity As ‘Crazy' Reset Starts By 2021, $1.6B
The last time memecoin's market cap was below $120 billion was on November 27th when it settled at $118 billion. The total market value of cryptocurrencies in this sector has decreased by 21% in the last 24 hours.
Memecoin market capitalization and daily trading volume. Source: CoinMarketCap
Total daily trading volume in the MemCoin sector has doubled over the same period, reflecting the magnitude of the selling pressure over the past 24 hours.
Dogecoin, the largest by market capitalization, led the losses, falling 5.6% in the past 24 hours. DOGE's rival SHIB also declined, recording daily losses of 10.4%, while Ethereum-based Pepe (PEPE), the only high-cap memecoin posting gains, rose 1.7%.
Top memecoins price performance. Source: CoinMarketCap
Memecoins OI will decrease significantly
The fall of memecoins on December 10 led to a drop in open interest (OI), while Pnut (PNUT) led the retreat with a 30% drop in OI over the past 24 hours.
Open interest refers to the total amount of pending derivative contracts that have not yet been completed. In a futures contract, for each seller, the buyer is required to settle the contract.
DOGE fell more than 20 percent on the day to $3.1 billion, nearly 6 times WIFF's $519 million in OI, which is down 27 percent over the same period. PEPE's OI stood at $302.4 million, down roughly 11 percent.
Memecoin OI Chart Source: CoinGlass
The falling OI of Memecoins shows the bearish pace in the market as many traders close many contracts in anticipation of a price drop.
Massive crypto liquidation comes with the memecoin crash
The crypto market has lost more than $1.3 billion in the last 12 hours alone, ending leveraged positions of more than $1.7 billion.
“Biggest long liquidation of this bull cycle so far,” CoinGlass said in a Dec. 10 post on X.
Source: CoinGlass
According to data from CoinGlass, futures tracking smaller altcoins and meme tokens have posted more losses than BTC or ETH futures due to abnormal activity.
Over $72.6 million in DOGE longs and over $22.35 million in SHIB longs accounted for most of the last half-day's liquidity on memecoins.
Similarly, more than $7.9 million in PEPE lengths and $3.6 million in WIF lengths were resolved during the same period.
Total crypto liquidity. Source: CoinGlass
This marks the biggest liquidity event since 2021, along with the start of the 2022 bear market. More recently, it was accompanied by a liquidity event similar to the December 5 flash crash, which saw more than $816 million of longs fall short of $280 million on December 5th.
The BTC price fell by up to 11% to $92,00 during this event, which led to a sell-off in altcoins, including memecoins. DOGE fell 12% on the same day, memecoins lost $1 billion in market capitalization.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
