Dogecoin (DOGE) Sees Spike in Demand for Short Positions

Dogecoin Suffers Price Decline, Triggering Surge in Liquidations

Leading meme coin Dogecoin (DOGE) has experienced a significant price decline in the past week. The drop intensified on June 17th, with DOGE plummeting to a three-month low of $0.12, leading to a spike in long liquidations, reaching $44.21 million that day. This represented the highest figure since the beginning of the year.

Short Traders Pay Funding Fee

During this market downturn, the value of short positions liquidated was under $400,000, while long liquidations surged. Consequently, DOGE's funding rate across cryptocurrency exchanges has been predominantly negative. As of this writing, the meme coin's weighted funding rate remains negative at -0.003%.

Funding Rate Explained

Funding rates are payments made between traders to align the market price of a futures contract with the underlying asset's spot price. A positive funding rate indicates higher demand for long positions, while a negative rate suggests more traders anticipate a price decline.

Price Prediction: Long Traders Face Challenges

Dogecoin's price has fallen below its 20-day exponential moving average (EMA) and 50-day simple moving average (SMA). This trendline breach signifies increased selling pressure and a bearish sentiment among traders.

Elder-Ray Index Confirms Bearishness

The negative Elder-Ray Index for DOGE confirms the bearish outlook. This indicator measures buyer and seller strength, and a negative value denotes market dominance by bears. As of now, the Elder-Ray Index value for DOGE stands at -0.023.

Outlook

If market control remains with bears and selling momentum continues, DOGE's value could potentially drop to $0.11. However, a shift towards bullish sentiment and increased buying pressure could push the coin's price towards $0.13.