Dogecoin (DOGE) and PEPE are two very well-known meme coins, currently facing significant leverage risks on trading platforms.
Both coins are now at a critical moment, surrounded by liquidation pools. In other words, these liquidation pools may trigger significant price volatility, regardless of whether the market is rising or falling.
DOGE and PEPE face high leverage risks on exchanges.
Specifically, the price fluctuations of DOGE have shown that liquidation levels have a significant impact on it. Over the past month, DOGE has experienced two rounds of large liquidation clusters.
Firstly, the area around $0.50 is a very important price range and a key area for bears. When the price approaches this position, the risk for short sellers increases significantly, potentially triggering a wave of liquidations.
In addition, below $0.35 is another key liquidation area, primarily affecting longs. When the price falls below this support level, it may trigger a wave of sell-offs, further pressuring DOGE's price.
It is noteworthy that the liquidation chart shows that long positions slightly dominate, indicating that most traders are optimistic about the market.
However, regardless of whether the market moves towards $0.50 or falls below $0.35, liquidation is almost inevitable.
Breaking through these key price ranges may trigger violent fluctuations and even provide potential trading opportunities.
PEPE has also recently experienced a wave of large liquidations. A sharp price increase led to a significant number of long positions being liquidated.
These liquidations mainly occurred when the price was below the then-current level, as many traders had expected the price to continue rising, but the sudden surge instead triggered stop-losses and forced liquidations. The heat map shows that trading activity during this period was very intense.
Additionally, the chart shows an increase in liquidation levels for both long and short positions, with long liquidations being dominant, especially after the price increase.
This has led to a large number of long positions being liquidated, occurring below the current price. When traders establish new long positions in these price ranges, they may become more cautious or hesitant.
If the price of PEPE tokens falls into these liquidation cluster areas, it may trigger more sell-offs, leading to further price declines.
PEPE VS DOGE token price trends.
In the previous cycle, the price movement comparison between PEPE and DOGE showed remarkable similarities, making PEPE the focus of the current cycle.
These two tokens have almost mirrored movements in their respective cycles, highlighting the potential repeatability of meme token trends.
After experiencing significant consolidation, DOGE has welcomed a strong rebound and broken through previous highs.
PEPE has also followed a similar pattern, with its initial surge resembling DOGE's early movements, indicating that PEPE may replicate DOGE's success.
PEPE's trend indicates that within a specific price range, there was initially an increase, followed by a breakout. This breakout phase marks the market's transition from accumulation to rapid price appreciation.
It is noteworthy that between November and December, PEPE's movements closely resembled DOGE's patterns from the previous cycle, during which DOGE experienced exponential growth.
If PEPE continues down this path, it may break historical highs, just like DOGE, becoming 'the king of this cycle.'
Current market expectations are that PEPE may not only replicate DOGE's successful trajectory but may even surpass it, as long as the popularity of meme coins and investor interest remain high.