The nascent Pepcoin Meme coin (PEPE) is the token that keeps giving, at least for now, as its market capitalization skyrocketed to nearly $1 billion just weeks after its birth.
The token has gone from strength to strength in the past week even as skeptics warned of an imminent crash, gaining around 500% in the past two weeks according to CoinGecko data.
These warnings centered around the apparent number of whales — or entities with large amounts of any token — that had purchased PEPE in the hours after it was first released in mid-April.
This has led to a boom in short interest among futures traders, as reported by CoinDesk. Shorts refer to bets on the price of a token.
Funding rates on the perpetual futures contracts linked to the token remain negative, indicating the dominance of bearish positions in the derivatives market. A negative funding ratio indicates that shorts are in control and willing to push longs to keep bearish bets open.
However, the 80% price hike in the last 24 hours has resulted in huge losses for these traders. CoinGlass Data It shows that shorts against PEPE lost at least $11 million on several exchanges over the past 24 hours — with traders losing $5.5 million on OKX cryptocurrency exchange alone, the highest number among their peers.
Traders lost another $2.2 million on Huobi, about $3.6 million on Bybit, and a few hundred thousand dollars on BitMEX. These exchanges all started offering PEPE futures trading last week.
PEPE’s losses came in third behind bitcoin (BTC) and ether (ETH) futures liquidations, which typically incur the highest losses in futures contracts.
Liquidation refers to when an exchange aggressively closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It occurs when a trader is unable to meet the margin requirements for a leveraged position (fails to have enough funds to hold the position open).
Large liquidations can mark the local top or bottom of a sharp price move, which may allow traders to position themselves accordingly.
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