DOGE traders betting on recovery lose $4 million in long liquidations as Dogecoin price crashes 14%

Amid the Binance fiasco taking place on Tuesday, the market still witnessed optimism among DOGE investors despite the Dogecoin price falling for the past three days. Investors are presently bearing losses but seem positive about a recovery, which is evident in their derivative positions.

Dogecoin price crashes for the third day

Dogecoin price, trading at $0.0749 at the time of writing, fell by 14% in the last three days. The meme coin made its investors significant profits after shooting up by 48.12% in the four weeks, which it is now close to losing. 

About a third of the profits observed by DOGE holders have already been wiped out, and the altcoin is likely to witness a further decline. This is evident from the Moving Average Convergence Divergence (MACD) indicator exhibiting a bearish crossover as well as a red bar on the histogram, confirming a bearish momentum.

This might lead to DOGE falling to test the crucial support level marked at $0.0700, losing which would not only undo half of the gains noted by investors in the past couple of days but also enable a crash to $0.0602.

DOGE/USD 1-day chart

However, if the investors’ optimism proves to be stronger than the bearish broader market cues and DOGE bounces off $0.0747, it might be able to recover most of the recent losses. The bearish thesis, as a result, would also be invalidated, enabling the meme coin a shot at reclaiming $0.0800.

DOGE holders are still optimistic

Dogecoin investors have faced losses, but they are not alone, as DOGE traders have also been witnessing the opposite of profits for the last three days. The traders that have been holding out long positions awaiting recovery lost out on more than $4 million in the past 24 hours and even more in the last three days.

Dogecoin liquidations

Despite such a huge chunk of long liquidations, traders do not seem to have given up. The positive funding rate evinces that Dogecoin is still observing higher long contracts than short contracts at the moment. 

Dogecoin funding rate

A positive funding rate indicates that more traders are taking long positions and expect the asset’s price to rise in the future. Thus, if Dogecoin price adheres to the wishes of its traders and investors, a decline could be avoided, otherwise further losses are likely.