DOGE Slightly Rises by 1.33% Behind the Scenes: The Triangular Game of ETF, Leverage, and Liquidation

DOGE exhibited an interesting paradox on January 20th: a 1.33% increase over 24 hours to $0.13, but a $1.761 billion shrinkage in market cap from its peak, with a 7-day decline of 5.59%. This seemingly mild rebound actually conceals a complex interaction of institutional innovation, market manipulation, and market sentiment. Behind the surface numbers is a fierce tug-of-war between bulls and bears, incremental funds and profit-taking.

Expectations Gap for Spot ETFs

The 21Shares Spot Dogecoin ETF (ticker TDOG) launched on Nasdaq on January 14th, with a management fee of 0.50%, opening a compliant gateway for traditional financial investors to participate in DOGE price fluctuations. Initial market response was positive, with DOGE briefly reaching a high of $0.15, reflecting strong market expectations of inflows of incremental funds.

However, subsequent price movements tell a different story. From the peak of $0.15 down to the current $0.13, a 13.3% decline, indicating that the ETF’s actual subscription scale may have fallen short of market expectations. In the context of a rebound at the start of the year, speculative funds began to take profits and exit. The ETF lacks sufficient new capital to absorb the selling pressure at high levels. This is the first mismatch between institutional innovation and market reality: while the framework is established, the actual flow of funds is more complex.

Risks of Institutional Funds

In the past two days, the market has staged a “rollercoaster” of institutional capital.

On one hand, according to the latest news, a whale that sold a large amount of Bitcoin in December last year established a long position of 15.6 million DOGE on Hyperliquid with 10x leverage, totaling $2.14 million at an entry price of $0.137621. This indicates that some institutional participants remain bullish on DOGE’s prospects.

On the other hand, whale address 0x10ea was liquidated entirely on its long DOGE position, losing $2.2 million. Additionally, 113 million DOGE (about $14.56 million) of long positions were liquidated, with total losses approaching $2.7 million. Such large liquidation events highlight how high-leverage operations can rapidly become triggers for liquidity shocks when market risk appetite shifts swiftly.

Regulatory Favorability and Short-term Sentiment Timing Mismatch

The CLARITY Act entered the U.S. Senate Banking and Agriculture Committees for formal review on January 15th. By regulating trading behaviors, banning false transactions, and requiring platform disclosures of reserves, the bill clears long-term compliance hurdles for crypto market participants—undoubtedly a positive institutional development for DOGE as a mainstream asset.

However, a second key timing mismatch appears here: the effectiveness of institutional innovation takes time to materialize and cannot provide immediate support for current short-term price fluctuations. During a risk-averse correction phase, the long-term benefits of the bill are suppressed by recent market sentiment, prompting speculative funds to exit.

How to interpret the current situation

DOGE’s current 1.33% rebound is more a short-term technical bounce than a trend reversal. The market is waiting for several key signals: actual subscription data for the ETF, subsequent institutional actions, and whether risk appetite truly stabilizes. Until these signals become clearer, volatility in the $0.12–$0.15 range may continue.

Summary

DOGE’s short-term performance reflects the typical features of today’s crypto market: a disconnect between institutional innovation and market sentiment, difficulty balancing institutional participation and risk management, and the tug-of-war between long-term positives and short-term pressures. The superficial 1.33% rise masks deeper uncertainties. Investors should remain alert to liquidity risks from high leverage, while recognizing that improved regulatory frameworks do clear obstacles for long-term participants. In short-term fluctuations, risks and opportunities often coexist.