By: Zeng Han-Jun, Head of Research, Market Capital Research

The last few days have brought great news for Dogecoin (DOGE) holders, as the popular memecoin has shown promising potential in its recent upward surge. This rise has attracted the attention of investors, leading to increased trading volume and heightened interest in the cryptocurrency. However, with increased volatility comes chaos in the futures market, resulting in a spike in Dogecoin liquidations.

Recent data reveals that Dogecoin liquidations have been the highest in the cryptocurrency futures market, surpassing even Bitcoin. Over the past 24 hours, approximately $7.19 million worth of Dogecoin liquidations were recorded, compared to Bitcoin’s $5.91 million. This indicates a significant level of volatility in the Dogecoin market, resulting in high leveraged positions suffering substantial losses and being forced into liquidation.

As Dogecoin experiences a net increase in value, the majority of the liquidations involve short contract holders. Approximately $4.24 million worth of short contracts have been liquidated, demonstrating the impact of the recent surge on speculative traders. The influx of new participants excited by the price rally may be tempted to employ excessive leverage, increasing the risk of liquidation.

The futures market can be particularly perilous during periods of high volatility. While leverage offers the potential for substantial profits, it also substantially raises the risk of liquidation. Speculators who succumb to the hype and employ excessive leverage may find themselves vulnerable to sudden market fluctuations. Therefore, it is crucial for uninformed traders to exercise caution and understand the potential risks associated with navigating the futures market during periods of high volatility.

When considering Dogecoin’s position among its cryptocurrency peers, its impressive performance is worth noting. With its recent surge, Dogecoin has climbed to become the seventh-largest asset in terms of total valuation, surpassing prominent cryptocurrencies like Cardano (ADA) and Solana (SOL). Currently trading around $0.0788, Dogecoin has experienced a notable 14% increase in value within the past week.

As Dogecoin continues to surge and attract attention from investors, it remains essential for traders to exercise caution in the face of heightened volatility. The spike in Dogecoin liquidations serves as a reminder of the risks associated with employing excessive leverage during times of market frenzy. However, Dogecoin’s strong performance and rising market capitalization highlight its growing prominence in the wider cryptocurrency landscape.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.