Dogecoin (DOGE) continues to shake the market with strong gains, while triggering a wave of mass liquidations of derivative positions as traders bet incorrectly on price trends.

1. Dogecoin rises sharply thanks to Bitcoin

Dogecoin surged to nearly $0.42 on Tuesday afternoon when $BTC reached a new historical peak, before slightly declining to around $0.39. This rapid price increase occurred after several days of neutral market volatility. This phenomenon continues to demonstrate the high volatility of DOGE—the leading meme cryptocurrency.

2. Mass liquidation of derivative positions

The strong volatility of Dogecoin has caused a massive liquidation wave in the derivatives market:

  • In the past 24 hours: A total of $25.5 million of DOGE derivative positions were liquidated, of which $14.7 million were short positions.

  • Specifically in the last 4 hours: Nearly $6 million of short positions were liquidated and about $5.6 million of long positions also met the same fate as prices adjusted.

In derivatives trading, "shorting" is betting that the asset price will decline. When the price rises instead of falling, these positions are liquidated and traders suffer significant losses.

3. Elon Musk and the DOGE effect

Dogecoin continues to attract attention thanks to Elon Musk—the richest person in the world and a long-time "fan" of this coin. Since 2019, Musk has publicly called Dogecoin his favorite cryptocurrency. Recently, he is said to be joining the government of elected President Donald Trump in charge of a new department called the "Department of Government Efficiency" (D.O.G.E), further increasing attention from the community and investors.

4. Bitcoin and its correlation with DOGE

Bitcoin—the largest cryptocurrency in the world—also experienced a slight adjustment after reaching a new peak of $94,040. Currently, Bitcoin's price fluctuates around $92,338, but the price increase of $BTC has contributed to a growth wave for other coins, especially DOGE.

Warning for investors

  • High risk: The price of Dogecoin is extremely volatile, heavily influenced by psychological factors and community interest rather than actual value.

  • Rapid losses: Derivatives trading, especially short selling, carries the risk of large losses when the market moves against predictions.

  • FOMO effect: Investors should be cautious, avoiding buying in just because of fear of missing out, especially when prices have risen sharply in a short time.

Conclusion

Dogecoin remains a highly speculative currency and has not demonstrated long-term value. Investors need to be cautious, especially when engaging in derivatives trading, to avoid being affected by large market volatility. The cryptocurrency market still offers many opportunities, but risk management and strategic investment are important factors in protecting your assets.