Memecoins, including Dogecoin (DOGE), Shiba Inu (SHIB), and Dogwifhat (WIF), experienced significant declines on December 10, 2023, as the cryptocurrency market faced a massive liquidation event totaling $1.7 billion. This downturn erased much of the gains made during a recent rally fueled by Donald Trump’s influence.
Key Takeaways
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Memecoin market cap drops to $119.6 billion, a three-week low.
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Dogecoin leads losses with a 5.6% decline; Shiba Inu down 10.4%.
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Over $1.7 billion in leveraged positions liquidated in 24 hours.
Memecoin Market Cap Takes A Hit
The recent price drop has caused the total market capitalization of memecoins to fall to $119.6 billion, marking a significant decline of 21% in just 24 hours. This is the lowest level since November 27, when the market cap was at $118 billion. The daily trading volume in the memecoin sector has nearly doubled, indicating heightened selling pressure.
Performance of Major Memecoins
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Dogecoin (DOGE): Down 5.6% in the last 24 hours.
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Shiba Inu (SHIB): Experienced a 10.4% drop.
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Dogwifhat (WIF): Also saw significant losses.
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Pepe (PEPE): The only top-cap memecoin to post gains, up 1.7%.
Open Interest Declines Sharply
The decline in memecoins was preceded by a notable decrease in open interest (OI), with Pnut (PNUT) leading the way with a 30% drop. Open interest reflects the total amount of pending derivative contracts that have not yet been settled. The following are the OI changes for major memecoins:
Memecoin
Open Interest Change
Current OI
DOGE
-20%
$3.1 billion
WIF
-27%
$519 million
PEPE
-11%
$302.4 million
The decrease in OI suggests a bearish sentiment in the market, as leveraged traders are closing contracts in anticipation of further price declines.
Massive Crypto Liquidations Accompany Memecoin Crash
The broader cryptocurrency market has seen over $1.7 billion in liquidations within the past 24 hours, with more than $1.3 billion occurring in just the last 12 hours. This event has been described as the largest long liquidation of the current bull cycle.
Liquidations across memecoins accounted for a significant portion of these losses:
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DOGE Longs: $72.6 million liquidated.
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SHIB Longs: $22.35 million liquidated.
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PEPE Longs: $7.9 million liquidated.
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WIF Longs: $3.6 million liquidated.
This liquidation event is the largest since 2021, coinciding with the onset of the 2022 bear market. A similar event occurred on December 5, leading to a flash crash that wiped out over $816 million in longs against $280 million in shorts.
Conclusion
The recent crash in memecoins, particularly Dogecoin and its counterparts, highlights the volatility and risks associated with cryptocurrency trading. As the market continues to react to external influences and internal pressures, investors are reminded to conduct thorough research and exercise caution in their trading strategies.