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On Monday, Dogecoin (DOGE) experienced a significant 5% surge in response to Twitter's rebranding. Despite the broader market downturn with bitcoin (BTC) dropping below $29,100 during the European morning hours, the memecoin managed to defy the trend and record notable gains.
Elon Musk's Twitter, which is now part of his artificial intelligence-focused group of companies called X.AI, is currently undergoing a rebranding process to be known simply as "X." Recently, Musk caught the attention of the public by adding the dogecoin ticker logo to his bio on Monday, sparking speculations about the possibility of dogecoin playing a more significant role in the revamped company.
In the meantime, a staggering sum of $30 million in long positions - comprising more than 96% of all leveraged futures contracts - was forcefully liquidated within a mere hour on bitcoin-tracked futures. This massive liquidation event potentially played a significant role in the abrupt downturn of the market.
Liquidation occurs when an exchange forcibly liquidates a trader's leveraged position because the trader has experienced either a partial or total loss of their initial margin. This situation arises when a trader is unable to meet the margin requirements for a leveraged position or lacks sufficient funds to maintain the trade open.
Significant liquidations can serve as indicators for potential local tops or bottoms in price movements, enabling traders to strategically position themselves.
Bitcoin's decline triggered a substantial downturn across various prominent tokens, with Tron's TRX and Polygon's MATIC witnessing a loss of 3.4%, while Solana's SOL plummeted by almost 5%.
In the meantime, experts have pointed out that the absence of positive news and a generally subdued summer season could exert additional downward pressure on bitcoin prices. Some analysts even set their sights on the $27,000 mark as a potential target.
“If bearish pressure intensifies, the next significant support level would be $27,000, the lower boundary of the rising channel from the November lows and the 200-week moving average,” said Alex Kuptsikevich, FxPro senior market analyst, in an email to CoinDesk.
The sentiment was mirrored by Simons Peters, markets analyst at eToro. “Bitcoin is beating a slow retreat at the moment as the price continues to trend down from recent highs. Although market dynamic in summer months can tend toward volatility with lower trading flows, the recent period has been remarkably calm for top cryptoassets in the market,” Peters told CoinDesk in an emailed statement.
“The softening of the price we’re watching currently suggests investors are looking for positivity to cling to, but with little forthcoming for now it is very much wait and see,” Peters added.
Source Coindesk
