Memecoins like Dogecoin (DOGE), Shiba Inu (SHIB) and Dogwifhat (WIF) were among the worst-performing cryptocurrencies on Dec. 10, wiping out a significant part of the gains made during the Donald Trump-fueled rally a few weeks ago.
Memecoin market cap takes a hit
The latest drop in memecoin prices has seen the total market capitalization of the sector shrink to reach a three-week low of $119.6 billion as of Dec. 10.
Related: Bitcoin sees most liquidations since 2021 as ‘crazy’ reset wipes $1.6B
The last time the memecoin market cap was below $120 billion was on Nov. 27 when it rested at $118 billion. The aggregate market value of cryptocurrencies in this sector is down 21% over the last 24 hours.
Memecoin market capitalization and daily trading volume. Source: CoinMarketCap
The total daily trading volume across the memecoin sector has nearly doubled over the same period, indicating the intensity of the selling pressure over the past 24 hours.
Dogecoin, the largest memecoin by market capitalization, led the losses, dropping 5.6% over the last 24 hours. DOGE’s rival SHIB was down as well, recording 10.4% daily losses, while Ethereum-based Pepe (PEPE) was the only top-cap memecoin posting gains, up 1.7%.
Top memecoins’ price performance. Source: CoinMarketCap
Memecoins OI drops sharply
The drop in memecoins on Dec. 10 was preceded by a decrease in open interest (OI), with Pnut (PNUT) leading the retreat with a 30% decline in OI over the last 24 hours.
Open interest refers to the total amount of pending derivative contracts that have not yet been settled. In a futures contract, for every seller, a buyer is required to settle the contract.
DOGE saw its IO drop by over 20% on the day to $3.1 billion, nearly six times WIF’s $519 million in OI, which had decreased by 27% over the same period. PEPE’s OI was standing at $302.4 million, down approximately 11%.
Memecoin OI chart. Source: CoinGlass
The drop in OI for memecoins indicates bearish momentum in the market as leverage traders close more contracts in anticipation of further decreases in price.
Massive crypto liquidations accompany memecoin crash
The crypto market drawdown has wiped out more than $1.7 billion in leveraged positions within the past 24 hours, with over $1.3 billion being wiped out over the last 12 hours alone.
“The biggest long liquidation of this bull cycle so far,” CoinGlass said in a Dec. 10 post on X.
Source: CoinGlass
Futures tracking smaller altcoins and meme tokens recorded higher losses than BTC or ETH futures in an unusual move, according to data from CoinGlass.
Over $72.6 million in DOGE longs and more than $22.35 million in SHIB longs accounted for the majority of liquidations across memecoins in the past half-a-day.
Similarly, more than $7.9 million PEPE longs and $3.6 million WIF longs were liquidated over the same period.
Total crypto liquidations. Source: CoinGlass
This marked the biggest liquidation event since 2021, accompanying the start of the 2022 bear market. More recently, a similar liquidation event accompanied the Dec. 5 flash crash that saw more than $816 million longs wiped out of the derivatives market against $280 million short.
During this event, BTC price dropped as much as 11% to $92,00, triggering a sell-off in altcoins, including memecoins. DOGE dropped 12% on the same day, while memecoins lost $1 billion in market capitalization.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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