Day: June 18, 2024

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Bullish bets on Dogecoin futures suffered significantly on Monday, with liquidations totaling $60 million as the meme token’s price dropped over 10% before a brief recovery. This decline occurred alongside a sell-off in major tokens, including Bitcoin, during Asian trading hours. The CoinDesk 20 Index, which tracks the broader crypto market, fell by 3.4% in the past 24 hours.

Bitcoin long positions lost $47 million, while Ether bullish bets were the hardest hit, losing $76 million. In total, crypto long positions saw liquidations exceeding $440 million due to profit-taking and a strengthening dollar, according to traders on Tuesday.

“The meme coin market has generally pulled back this month as Bitcoin prices come under pressure,” stated Lucy Hu, a senior analyst at Metalpha. “The expectation of a rate cut by the Fed has led investors to shift from risky assets to safer ones, impacting DOGE as one of the largest meme coins in the market.”

Data from Coinanlyze reveals that nearly all DOGE liquidation activity over the past 24 hours came from long positions, with only about $600,000 worth of short positions being liquidated. These figures represent the highest for DOGE futures since May 2021, with over $44 million of the liquidations occurring on Huobi, a crypto exchange favored by Asia-based traders.

Open interest, or the total number of unsettled futures bets, dropped 16% to $600 million. Additionally, a long-short ratio tracking DOGE futures indicated a bearish sentiment, standing at 0.94, suggesting traders are positioning for further declines.

Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to partial or total loss of the trader’s initial margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they lack sufficient funds to keep the trade open.

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Recent spikes in Google search queries related to cryptocurrencies have often signaled major market peaks, aligning with Warren Buffett’s advice to buy in doom and sell in boom. This pattern now appears in the market for AI-related tokens.

Tokens like FET, RNDR, TAO, and GRT have seen their market value drop by up to 30% over the past week, according to data from Coingecko. Concurrently, Google Trends indicates that search interest in artificial intelligence has likely peaked.

FET ranks as the fourth-worst performing among the top 100 cryptocurrencies in the past seven days. In contrast, Bitcoin fell just 2.8% during the same period, while the broader CoinDesk 20 Index declined by 6%.

Google Trends, often used to gauge retail investor interest in trending topics, shows that the search query “AI” reached its highest value of 100 last week—the peak in the past five years. This score represents the maximum search volume for the query within a given timeframe.

This surge in AI interest suggests that public excitement has reached a new high, drawing more retail investors into the market. Nvidia (NASDAQ:NVDA), a leading AI chipmaker, has also seen increased attention alongside AI trends.

Although indicative, Google Trends can serve as a valuable tool to watch, as retail investors often act based on emotions and are usually the last to enter bull markets and the first to exit bear markets. For instance, spikes in searches for Bitcoin and Solana coincided with their respective price peaks in May 2021 and November 2021.

It’s important to note that Bitcoin, which has a strong positive correlation with Nvidia, bottomed out with tech stocks in late 2022 following the launch of ChatGPT, which heightened general awareness of artificial intelligence. GMO’s Chief Investment Strategist Jeremy Grantham has noted that the AI rally might be a bubble within a bubble, potentially on the verge of bursting.

This insight may encourage investors to exercise caution when making investment decisions.

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Sonic, a gaming-focused layer-2 blockchain built on Solana, has successfully raised $12 million in a recent funding round. The Series A round was led by Bitkraft and included investments from Galaxy Interactive and Big Brain Holdings.

The funds will be allocated to expanding the Sonic protocol, which features game development tools tailored for the Solana ecosystem. According to the press release, Sonic offers “built-in mechanisms designed specifically for game development and execution on Solana, such as a sandbox environment, customizable gaming primitives, and extensible data types, all while providing the fastest on-chain gaming experience.”

Sonic was developed by Mirror World Labs, a two-year-old infrastructure company led by CEO Chris Zhu. Zhu, who graduated from New York University in 2020 and previously worked for ByteDance, the parent company of TikTok, has been pivotal in driving Sonic’s growth.

“We expect the Sonic SVM to become the go-to destination for any gaming studio that wants to build games within the Solana ecosystem,” said Justin Swart, principal at Bitkraft, in the press release.

This latest fundraising round follows an earlier $4 million seed round in 2022, bringing the total funds raised to $16 million.

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