- Dogecoin sinks below $0.20 as crypto markets face heavy losses.
- Over $751 million in long positions wiped out in hours.
- Rising dollar and inflation fears trigger panic across digital assets.
Dogecoin extended its losing streak into August, plunging below critical technical levels amid a wave of crypto market liquidations. The popular memecoin dropped over 9% in the last 24 hours, falling to $0.201, and recorded an 11% loss over the past week.
The wider crypto market also experienced substantial pressure as over $751 million worth of leveraged positions were liquidated. Data by CoinGlass reveals that long positions contributed an outrageous $706 million out of the total amount, demonstrating that traders were taken aback by the prompt sell-off.
This steep market action was undertaken after the US dollar soared, with the DXY index rising by more than 3% in the last month.
Increased dollar strength typically signals tighter financial conditions, prompting investors to reduce exposure to volatile assets. Digital currencies such as Dogecoin were the worst hit by this change of mood, as risk assets took a beating.
When Dogecoin fell below its 200-day simple moving average to $0.212, market analysts started to keep an eye on the $0.20 mark to provide stability.
Also Read: Ignore the Dip, XRP Could See Its Highest Monthly Close Ever – Here’s Why
Meanwhile, the worry about inflation reappeared due to the patterns in the favored inflation index released by the Federal Reserve. Based on new data, the core Personal Consumption Expenditures (PCE) index rose by 2.8 % year-on-year, equal to the level of the previous month and the highest since February.
The core rate of inflation, which excludes food and energy costs, increased to 2.6 percent in June, up one-tenth of a percent in May.
Traders Brace for More Losses as Dogecoin Tests Key Technical Levels
Dogecoin has now posted five consecutive days of losses, falling steadily from a high of $0.248 on July 28. Not only did the latest decline pierce beneath the 200-day SMA, but it also endangers the $0.20 support area. In case such a point does not play out, the 50-day SMA at $0.194 could be the next significant support level that DOGE could rally against.
Source: Tradingview
Expectations of rate cuts in September have been fading as the FED continues holding interest rates at 4.25%. This move has placed added pressure on investor confidence, particularly in the crypto sphere, where liquidity has already begun to dry up.
Dogecoin is also in the spotlight, as traders see its next steps in light of its volatility. Recovery above $0.212 might indicate a new gain in momentum, although at present, the market shows that it is better to be careful.
The fact that Dogecoin has broken through a support level indicates a general panic in crypto markets.
With $751 million in long liquidations and no relief from macroeconomic pressure, the path ahead for digital assets may remain rocky.
Also Read: BlackRock XRP ETF Filing Imminent? Here’s Why the Researcher Thinks So
