Memecoins like Dogecoin (DOGE-USD), Shiba Inu (SHIB), and Dogwifhat (WIF) took a brutal hit on December 10, with losses far surpassing the downturn in Bitcoin and Ethereum (ETH-USD). The collective market value of these tokens tumbled, dipping to a three-week low of $119.6 billion. The total decline across the sector was steep—21% in just 24 hours.
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Dogecoin Leads the Decline
Dogecoin, the largest memecoin, bore the brunt of the crash, losing 5.6% in a day. SHIB fared even worse, dropping 10.4%. Meanwhile, Ethereum-based Pepe (PEPE) managed a small gain of 1.7%. But these losses are part of a broader trend. As CoinGlass noted, over $1.7 billion in crypto liquidations occurred in just 24 hours. The majority of this came from leveraged positions in memecoins, with $72.6 million in DOGE longs and $22.35 million in SHIB longs wiped out.
What’s Behind the Sell-Off?
Open interest (OI), which measures outstanding derivative contracts, also dropped sharply. CoinGlass observed a 30% decline in OI for Pnut (PNUT) and a 20% drop in DOGE’s OI. This suggests traders were pulling out positions in anticipation of further price drops.
It’s a huge wake-up call for the memecoin market, with the crash marking the biggest liquidation event since 2021. With leverage traders closing out contracts, these volatile tokens are in for a rough ride.
At the time of writing, Dogecoin is priced at $0.3739, down 14.4% over the past 24 hours.
