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The Pepe coin (PEPE) has been continuously generating positive returns, at least up to this point. Despite warnings from skeptics of an imminent collapse, the token has been steadily increasing in value over the past week, soaring by approximately 500% in the past two weeks according to CoinGecko data.

The concerns revolved around the perceived number of whales - or individuals/entities holding significant amounts of the token - who acquired PEPE shortly after its initial launch in mid-April.

As reported by CoinDesk, this has caused a surge in short interest among futures traders. Shorts are essentially wagers placed against the price of a particular token.

Perpetual futures funding rates associated with the token continue to be negative, indicating that bearish positions still hold sway in the derivatives market. A negative funding rate suggests that shorts are the dominant force and are willing to pay longs to keep their pessimistic positions active.

In the past 24 hours, the token has experienced an 80% surge in price, resulting in significant losses for traders with bearish positions. According to CoinGlass data, short positions against Pepe incurred losses of at least $11 million across multiple exchanges in the same period, with traders on crypto exchange OKX alone losing $5.5 million - the highest amount among their peers.

In addition, traders lost around $2.2 million on Huobi, approximately $3.6 million on Bybit, and a few hundred thousand dollars on BitMEX, all of which began offering Pepe futures trading within the past week.

When it comes to futures liquidations, losses incurred from Pepe were ranked third, behind only bitcoin (BTC) and ether (ETH) futures - which typically account for the largest futures losses.

Liquidation occurs when an exchange forcibly closes a leveraged position held by a trader due to either a complete or partial loss of their initial margin. This action is taken when the trader is unable to meet the margin requirements necessary to maintain their leveraged position, which means they do not have enough funds to keep the trade open.

Significant liquidations can indicate a potential local top or bottom of a steep price movement, providing traders with an opportunity to position themselves accordingly.

Source Coindesk