Dogecoin Liquidations Surge as DOGE Hits $0.10: Should You Buy the Dip?

Dogecoin Liquidations Surge Amid Market Downturn

Amid the ongoing market decline, Dogecoin (DOGE) has witnessed a significant increase in liquidations. Data from Coinglass indicates an 98% surge in liquidations to $11.15 million within the past 24 hours, with $10.07 million attributed to long positions and $1.08 million to short positions.

Spike in Dogecoin Liquidations

The recent spike in liquidations can be attributed to DOGE's price decline to $0.10, resulting in investors contemplating whether to capitalize on the downturn. The liquidation heatmap highlights a concentration of liquidity around $0.12, suggesting that a price recovery towards that level is possible with increased buying pressure.

Divergence in Price and Daily Active Addresses

Despite DOGE's price drop, a divergence has emerged between price and Daily Active Addresses (DAA). DAA, which measures the number of unique addresses interacting with the Dogecoin blockchain, has declined by -58.32%. This indicates that network activity is outpacing price growth, potentially implying an undervaluation of DOGE relative to its on-chain activity.

Should Investors Buy the Dip?

Determining whether it is an opportune time to purchase DOGE warrants consideration of several factors. In the immediate term, DOGE may consolidate around $0.10; however, a shift in sentiment could trigger accumulation, potentially pushing the price towards the $0.12 support zone.

For those optimistic about Dogecoin's long-term prospects, this may present a buying opportunity. Despite the recent liquidations, DOGE's 24-hour trading volume has increased by 62% to $1.6 billion, signaling renewed investor interest. Analysts predict that DOGE could reach the $2 mark based on its past performance.

However, investors should remain cautious and closely monitor network activity and price movements before making investment decisions.