Dogecoin trading volume has skyrocketed over the past 24 hours, and liquidations have also increased during this time. The increase in these figures comes as a result of a significant drop in the price of Dogecoin, which is down more than 5% in the past 24 hours.

Dogecoin Trading Volume and Liquidations See Significant Spike

CoinMarketCap data shows that Dogecoin trading volume has increased by more than 57% in the past 24 hours, with more than $6 billion traded during the period. Meanwhile, Coinglass data shows that Dogecoin liquidations have exceeded $31 million, with $25 million and $5.8 million in long and short positions liquidated.

Long positions were hit the hardest as Dogecoin's price fell below $0.40. This came after Jerome Powell's speech painted a bearish picture for the leading meme coin. As crypto analyst Kevin Capital revealed, Dogecoin's technical indicators were bearish, and macroeconomic fundamentals only added to the damage.

Powell suggested that the US Federal Reserve would likely pause interest rate cuts next year, which immediately sparked bearish sentiment among traders and led to a sell-off. This contributed to a spike in trading volumes, as investors sought to dump their coins, given the Fed's hawkish stance on risk assets like Dogecoin.

However, Kevin Capital believes that traders are overreacting to Jerome Powell's speech. The crypto analyst believes that Dogecoin will recover from this price correction, claiming that the dip will be bought in. However, it is worth mentioning Dogecoin's correlation with Bitcoin, as Kevin Capital has previously pointed out that DOGE's next move will depend on BTC.

Bitcoin price has dropped below the psychological price of $100,000 and is currently looking bearish. Therefore, a Dogecoin price recovery is unlikely until Bitcoin sees a bullish reversal.

Increased volatility is not unusual

Cryptocurrency analyst Master Kenobi also commented on the Dogecoin price drop, saying that increased volatility at this stage of the bull market is not unusual. However, the analyst suggested that traders should avoid getting shaken out and instead hold their positions. This comes as he stated that market makers who pump money into the market would rather see market participants exit with a 90% loss than a 10x gain.

Bitcoinist recently reported that Dogecoin sentiment has turned negative again, suggesting that DOGE holders may be looking to sell their coins even at a loss. Kevin Capital has previously stated that the Dogecoin bull run is not over yet, suggesting that there is no need to be pessimistic at this point despite the price correction. He advised long-term holders to just sit back and wait for higher prices.

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