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Dogecoin short squeeze: Futures position liquidations spike as DOGE interest, price rise after Musk Twitter takeover

By Darius McQuaid

Edited by Charlie Mellor

12:53, 31 October 2022

Image of Elon Musk deep in thought next to the blue bird logo of Twitter
After purchasing Twitter, Musk declared on Twitter: “Let the good times roll” – Photo: Getty Images

Following Elon Musk’s purchase of Twitter, the crypto dogecoin (DOGE) has enjoyed additional interest from the crypto market, a price increase and has seen one of the largest liquidations among futures that track crypto majors.

DOGE futures has seen more than $89m (£77m) in liquidations since 28 October, with $52m (£45m) of that number coming from short traders, or people betting against the crypto’s rise in price.     

DOGE to USD 

Over the past 24 hours, DOGE liquidations were the highest among all cryptos at over $27m. Bitcoin (BTC) and Ethereum (ETH) futures, which tend to take the top spot, came in at $14m and $12m in losses respectively, reported CoinDesk.   

Liquidations occur when an exchange is forced to close a trader’s position following a partial or total loss of the trader’s initial margin.

It is believed the liquidations may have contributed to a short squeeze as DOGE has seen its price increase since 24 October by 105% to $0.1224, according to CoinMarketCap.

However, at the time of writing on 31 October, DOGE was down by 3.55% compared with the previous 24 hours.

‘The bird is freed’

Once Musk, who is also the CEO of Tesla (TSLA) and SpaceX, bought the microblogging and social networking service Twitter for $44bn (£38bn), he tweeted “the bird is freed” early on 28 October, in reference to Twitter’s bird logo.

DOGE/USD

0.12 Price
-2.990% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,416.83 Price
+0.020% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

XRP/USD

0.58 Price
-8.930% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BCH/USD

383.85 Price
+1.520% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

Later that day, Musk then tweeted: “Let the good times roll.”

One of the first things Musk did was to fire three top executives of Twitter including Parag Agrawal, the former CEO of the company.

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Unofficial CEO of dogecoin

In April 2019, in a Twitter poll conducted by DOGE, Musk was named the unofficial CEO of dogecoin, beating other crypto luminaries such as Vitalik Buterin, co-founder of Ethereum, Charlie Lee, creator of litecoin (LTC), and Marshall Hayner, CEO of Metal Pay.   

Also, in August 2021 the Dogecoin Foundation was re-established with the addition of two new advisers, Buterin and Jared Birchall, who represents Musk and is head of Musk’s Family Office. Buterin is listed as a blockchain and crypto adviser while Birchall as a legal and finance adviser.

The non-profit organisation was set up in 2014 but became inactive over time and dissolved. The foundation was established to provide “support for the crypto through development and advocacy” to prevent abuse and fraud of the crypto, and to provide a “roadmap and governance” for the future of dogecoin.

The Dogecoin Foundation also has a manifesto that states: “Being useful, we value utility over technical brilliance. Being personable, we value individuals and interactions over profit-driven economics. Being welcoming, we value collaboration and trust over competition and exclusivity. Being reliable, we value working solutions over speed of delivery.”

Markets in this article

BTC/USD
Bitcoin / USD
63859.00 USD
-666.3 -1.030%
DOGE/USD
DogeCoin / USD
0.1200272 USD
-0.0036757 -2.990%
ETH/USD
Ethereum / USD
3416.83 USD
0.61 +0.020%
LTC/USD
Litecoin / USD
71.50 USD
-0.95 -1.320%
TSLA
Tesla Inc (Extended Hours)
255.44 USD
7.86 +3.170%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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