The market rout over the past 24 hours has triggered a major liquidation in Dogecoin (DOGE), such as has not been recorded since at least May 2021. Per data from CoinGlass, the broader market has printed $434.64 million in liquidations over the past 24 hours, with Dogecoin featuring prominently.
Dogecoin's historic liquidation
Since it is a meme coin, many traders generally limit their exposure to Dogecoin (DOGE) and its accompanying rivals. However, the 10.54% slump to $0.12 in its price has left many long traders in an impossible position.
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The market shift led to $60.86 million in total liquidations, with $60.23 million attributed to long traders only. This amount is equivalent to a total of 507,166,666 DOGE liquidated thus far. It remains unknown whether this trend will be sustained, however, the figures recorded underscore the overexposure by market participants to the meme coin.
The confidence in the potential of Dogecoin to reclaim lost valuations accounts for why many futures traders went long on the coin. There has been an intense whale accumulation in recent times, initially helping to cushion the sell-off and resulting in a 22% drop over the past month.
Bear slump is good
For overexposed traders, the bearish slump might have caused a major loss at the moment, but when the bigger picture is factored in, this drawdown is a positive switch for Dogecoin.
With the market in overselling mode, the Relative Strength Index of DOGE has slumped to 28. After a period of drawdown, bears on the market might run out of additional DOGE to offload. At this point, Dogecoin might begin to see a renewed "buy the dip" trend from a properly discounted price range.
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If this scenario plays out, the coin might reclaim its lost spot market valuation and ultimately maintain its stance as the most capitalized meme coin on the top 10 list of all cryptocurrencies.