This article is also available in Spanish.
As the market recovers, open interest in major assets has been rising, but Dogecoin doesn’t seem to be following the trend. The meme coin has been muted, failing to move as much as other large-cap coins like Bitcoin and Solana. Naturally, the direction of open interest can impact Dogecoin’s price performance. So, what could this muted open interest mean for the meme coin’s price going forward?
Dogecoin Open Interest Fails to Move
according to Data From the Coinglass website, Dogecoin open interest fails to surpass $500M Again. On Thursday, Dogecoin’s open interest hit $493.97 million, still well off its all-time high. This comes even as the meme coin’s open interest surged 6.9% over a 24-hour period, with notable jumps across crypto exchanges like OKX and Bitget.
Related reading
Despite this increase, Dogecoin’s open interest is still well below its August highs. Open interest started August at a level above $618 million. However, it has remained low since then, suggesting that crypto traders have turned their attention elsewhere.
What’s even more worrying is the fact that open interest is more than 70% below its all-time high in March 2024. On March 29, 2024, Open interest in Dogecoin DOGE’s open value hit a new high of $2.21 billion. But since then, open value has been steadily declining. At Thursday’s $498 million, DOGE’s open value is now down 77% from March’s figures.
Why This Pullback Could Be Good For DOGE
Open interest gives the total number of open options or futures contracts in the market for a particular digital asset. Basically, it helps investors know whether traders are betting heavily on a cryptocurrency’s recovery or decline.
Related reading
Looking at Dogecoin data, it shows that traders are not as focused on the meme coin as they once were. However, this is not always a bad thing, as periods of low open interest have often signaled a market bottom. Low open interest usually gives investors a good time to enter the coin, as the price often drops along with open interest. As the Bitcoin price recovers, the Dogecoin price is expected to follow, and when open interest starts to recover, the DOGE price is expected to grow rapidly with it.
We saw a similar scenario in January 2024, where open interest hit a low of around $300 million. However, over the next few months, Open interest has increased by more than 630%, Which caused the price of Dogecoin to rise by more than 100%.
If the same scenario happens here, DOGE price could double again. This would put the price firmly above the $0.2 level, especially with the price expected to rise in the last quarter of the year.
Featured image created using Dall.E, chart from Tradingview.com
Comments are closed, but trackbacks and pingbacks are open.