The cryptocurrency market climbed for a third consecutive day, triggering widespread liquidations among short sellers. Over the past 24 hours, short positions totaling $1.24 billion were wiped out, further intensifying market volatility.
Dogecoin and leading altcoins post strong gains
Dogecoin demonstrated notable momentum, rising 10.11% in the past day to $0.0842 and advancing 21.33% for the week. The meme coin’s price increased steadily from its August 19 low of $0.069, reaching an intraday peak of $0.0857 early Friday.
Other major crypto assets also recorded significant gains. XRP surged 24% within 24 hours, while Zcash climbed 18% and Bitcoin Cash increased by 21%. These price movements contributed to a more optimistic sentiment across the broader crypto ecosystem.
| Crypto Asset | 24H Change | Weekly Change | Current Price |
|---|---|---|---|
| Dogecoin | +10.11% | +21.33% | $0.0842 |
| XRP | +24% | N/A | N/A |
| Zcash | +18% | N/A | N/A |
| Bitcoin Cash | +21% | N/A | N/A |
Warnings of potential bull trap from Dogecoin community
Despite the positive performance, some in the Dogecoin community expressed caution. Mishaboar, a well-known voice among Dogecoin supporters, urged traders to remain vigilant during the rally. He advised, “It is good to see the market moving in a different direction, but be extremely careful.”
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AAPLIt is good to see the market moving in a different direction, but be extremely careful.
Mishaboar highlighted the possibility of a bull trap, where strong price increases tempt traders to open long positions just before a sharp reversal. He raised doubts about the sustainability of the uptrend, pointing to the influence of high-profile events, including a White House gathering. The event, held Wednesday, brought together executives from Coinbase, Gemini, Ripple, and Chainlink. Cryptocurrencies rallied following the meeting.
Mishaboar questioned the reliability of gains occurring around major crypto-focused events, warning that fundamentals may not support the price spike amid speculative fervor.
Mini dictionary: Bull trap, a situation where a market rally encourages investors to go long, but this move soon reverses and prices fall sharply.
Macro factors influence crypto rally
Macroeconomic trends also played a role, as cryptocurrencies rose alongside traditional hard assets like gold. At the same time, the US dollar weakened against other major currencies. These developments suggest that broader financial factors are contributing to the crypto uptrend, beyond those cited by community analysts.
Meanwhile, the US Treasury plans to double its buybacks of long-term government bonds, increasing repurchases to at least $4 billion per operation until early November. Analysts view this move as a potential driver of positive sentiment across financial markets, including crypto. The surge in liquidations of short positions has further fueled the ongoing rally.
Market participants are now monitoring overbought indicators, which could signal the possibility of a reversal in prices if the rally loses momentum.
