Major cryptocurrencies experienced volatile trading at the start of August as the dollar strengthened. Dogecoin (DOGE) fell nearly 10%, marking one of its steepest daily declines.
Over $751 million in leveraged positions were liquidated on cryptocurrency markets, with longs accounting for the vast majority of the loss. According to CoinGlass data, longs, or bullish bets, contributed $706 million in total liquidations, as traders were caught off guard amid the rapid sell-off.
The DXY, which tracks the value of the dollar versus major fiat currencies, has risen by more than 3% in four weeks, pointing to potential financial tightening, which frequently pushes traders to cut their exposure to risky assets.
According to data released Thursday, the Fed's preferred inflation indicator, the core PCE, increased 2.8% year-on-year, matching May's rate and tying for the highest level since February. The personal consumption expenditures price index increased 2.6% year-on-year in June, up from 2.4% in May.
Dogecoin faces market drop
Earlier this week, the central bank kept interest rates constant at 4.25%, dashing traders' hopes for more rate cuts in September.
At press time, DOGE was trading down 9.17% in the last 24 hours to $0.201 and down 11% weekly. Dogecoin has steadily declined since a high of $0.248 on July 28 and would mark its fifth day of dropping if today ends in losses. The current market sell-off has brought Dogecoin below the 200-day SMA at $0.212.
Traders are watching whether DOGE can sustain its footing above the $0.20 level in the coming sessions. If this level is lost, Dogecoin may eye a retest of support at the 50-day SMA at $0.194.
On the other hand, bulls would attempt to push Dogecoin above the 200-day SMA at $0.212 if positive momentum returns to the market.
