Dogecoin (DOGE) soared on Oct. 28 amid massive capital rotations out of its top meme coin rival Shiba Inu’s (SHIB) market.
Notably, the DOGE price rallied by a little over 44% to reach its intraday high of $0.3449. Its gains appeared in contrast to SHIB’s losses in the same period. On the other hand, the so-called Dogecoin Killer dropped almost 28% to log an intraday low at around $0.00005700—in the same hour DOGE printed its daily top.
The sudden price rally also pushed Dogecoin’s market cap over $40 billion, a mettle Shiba Inu achieved hours before, with the two cryptocurrencies now neck and neck currently battling for the ninth place by market cap
Traders started flocking into Dogecoin markets hours after Elon Musk, the CEO of Tesla and SpaceX posted a new tweet about the meme cryptocurrency.
If I send you 2 Doge, will you promise to send me 1 Doge?
— Elon Musk (@elonmusk) October 27, 2021
Musk’s earlier supportive tweets prompted DOGE to climb by more than 1,500% in the first five months of 2021.
Long DOGE, Short SHIB
Shiba Inu rallied exponentially heading into Q4, rising by around 1,200% in October on hopes that it would gain a listing on Robinhood, a U.S.-based zero-fee trading app, and its foray into the emerging decentralized finance (DeFi) and nonfungible token (NFT) sectors with new product launches.
Nonetheless, SHIB’s supersonic bull run also made it overvalued based on some key metrics, notably the Relative Strength Index. So it appears, spot and derivative traders decided to secure/rotate their profits.
Su Zhu, co-founder, CEO, and CIO at fund management firm Three Arrow Capital noted earlier on Thursday that traders rotated their easy-to-short Shiba Inu perpetual swap profits — as SHIB topped out at $0.00008854 — into the Dogecoin perpetual market.
The former Deutsche Bank trader suggested that DOGE can rally toward $0.88 next should traders rotate profits from SHIB to Dogecoin.
88e-6 $shib touched
— Zhu Su (@zhusu) October 28, 2021
Around $20.8M DOGE rekt
Dogecoin’s price moves also caught derivatives traders off-guard as they lost about $20.80 million in total liquidations across the previous 24 hours. Around $18.17 million worth of those liquidations emerged out of leveraged long bets after the DOGE price dropped to its weekly low of $0.2179 Wednesday.
In contrast, the ongoing 12-hour timeframe saw bears making more losses than bulls, with $8.9 million worth of bearish Dogecoin bets getting liquidated against $5.22 million worth of bullish bets concerning the same token.
On the whole, however, Dogecoin traders were the majority short in the previous 24 hours, with FTX and OKEx users turning out to be exceptionally bullish with 58% and 77% of their net positions skewed long.
A sudden bearish reversal in the Shiba Inu market also led to SHIB liquidations worth $31.41 million, the third highest among all the cryptocurrencies in the previous 24 hours.
PostyXBT, an independent market analyst, warned about excessive leverages in both SHIB and DOGE markets.
“Play spot and not leverage,” he said, adding that “the volatility could quite easily wipe out before a big move in intended direction.”
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