Dogecoin Slumps 10% Amid Bitcoin's Slide to $96K, $560M Long Positions Liquidated

Dogecoin Slumps Amid Economic Data-Fueled Bitcoin Dip

Dogecoin (DOGE) led declines among major cryptocurrencies as Bitcoin (BTC) dropped to near $96,000. Fresh economic data spurred a surge in U.S. treasury yields, driving a market sell-off.

DOGE saw a 10% decline, with Solana's SOL, Cardano's ADA, BNB Chain's BNB, and Ethereum (ETH) also experiencing losses of at least 7%. Bitcoin fell 5.5%, while the CoinDesk 20 (CD20) index, tracking top tokens by market capitalization, declined by 7.1%.

Analysis reveals $560 million in liquidations of crypto-tracked futures betting on higher prices, setting a relatively high level for the year's start.

Crypto losses mirrored declines in U.S. stocks. A stronger-than-expected report from the Institute for Supply Management (ISM) on U.S. service providers, with prices-paid reaching their highest since early 2023, ignited concerns.

Concurrently, U.S. job openings exceeded forecasts, leading to a decrease in Treasury securities across maturities and pushing the 10-year Treasury yield to its highest since May.

Liquidations occur when an exchange closes a leveraged position due to unmet margin requirements. Mass liquidations can create a cycle of falling prices leading to further liquidations.

Market observers view the drop as a temporary setback in the long term. "Markets were hit hard after strong U.S. job data dulled hopes for rate cuts this year," said Vince Yang, CEO of zkLink. "It's a sentiment shift we've seen before."

"We remain optimistic. Dips often precede bullish movements," Yang added, citing the current market cycle and the incoming crypto-friendly U.S. administration.

QCP Capital expresses caution, expecting continued volatility in January due to structural risks. The U.S. Treasury debt ceiling reinstatement could lead to market volatility as discussions intensify, the company notes.