CoinWorld reported:
Following Bitcoin’s drop below $60,000, the market plunged into panic. Recently, the Memecoin market has fallen out of favor, but one candidate seems to have caught investors’ interest.
Over the past 36 hours, the price of Bitcoin (BTC) fell 9% from $588,000 to $555,000, before rebounding 6% to $568,000 at the time of writing. This volatility resulted in significant cryptocurrency liquidations, causing further distress for long positions.
The decline in Bitcoin’s price stems from several factors, including news of the German government selling BTC and Mt. Gox moving $2.7 billion worth of BTC to a new address.
Given the scale of these fluctuations, cryptocurrency liquidations may ease in the coming days as the market requires time to accumulate liquidity before withdrawals can be made.
The Memecoin sector has remained unaffected by all this turmoil. While it was one of the biggest gainers in late May, it has turned bearish in recent weeks.
The bloodbath has temporarily halted. According to Coinglass data, between July 4th and 5th, a total of $750.55 million in long positions and $198.66 million in short positions were liquidated. Here, liquidation refers to the forced closure of a trader’s positions in the futures market when their account margin is no longer sufficient to maintain their open positions.
In turn, as they close, market orders are introduced in the opposite direction to the open positions prior to liquidation. Hence, due to the rapid price drop, a series of cascading liquidations from long positions resulted in the liquidation.
Large-scale cryptocurrency liquidations conducted in this manner may benefit the market. It can eliminate overly leveraged traders, pave the way for spot-driven price fluctuations, and reduce speculative influence.
By market capitalization, the third-largest Memecoin, Pepe, may benefit from the recent selling wave.
Most major Memecoins are struggling, with one exception. AMBCrypto found that Pepe’s liquidation heatmap shows a significant wipeout in the range from $0.000077 to $0.000095. This situation has been intensifying since mid-May. Up north, the $0.000014 region may be the next magnetic area for altcoin prices.
AMBCrypto’s analysis of Dogecoin [DOGE] and Shiba Inu [SHIB] indicates a set of liquidation levels further south for these two Memecoins.
Therefore, the recovery of DOGE or SHIB may require more time and deeper correction. Despite Shiba Inu showing optimism on higher timeframes, Pepe may recover the quickest from recent losses.
Is your portfolio in the green? Check out the Pepe profit calculator.
PEPE bulls must defend the range of $0.0000796 to $0.0000089 to maintain bullish hopes on higher timeframes. The recent cryptocurrency liquidations have sparked market panic, but there is hope that prices may rebound in July.