Dogecoin’s Open Interest Faces Severe Decline
Dogecoin, the leading meme-based cryptocurrency, has seen a dramatic decline in its open interest, plummeting over $3 billion since January. This downturn has contributed to a growing bearish sentiment among investors, a trend that may continue as the broader cryptocurrency market struggles.
Significant Drop in Dogecoin’s Open Interest
Recent data from Coinglass illustrates that Dogecoin’s open interest has decreased significantly, currently holding at $1.91 billion. The derivatives volume has also experienced a nearly 30% reduction, now standing at $3.71 billion. This downward trajectory indicates waning interest among traders in the Dogecoin ecosystem.
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Given the prevailing bearish sentiment, further declines in Dogecoin’s open interest appear likely. This sentiment has been fueled by an overarching downtrend in the cryptocurrency market, which has also led to a steep drop in Dogecoin’s price. The meme coin faces the potential of falling below the crucial $0.2 price threshold, a move that analysts like Ali Martinez caution could signify the end of its bullish phase.
Additional Metrics Reinforce Bearish Outlook
Beyond the decline in open interest, other metrics also suggest a bearish future for Dogecoin. Martinez highlighted in a recent post that Dogecoin’s network activity has significantly decreased, with the creation of new addresses plummeting from 1.29 million in November to just 30,815 currently.
Similarly, the number of active Dogecoin addresses has sharply fallen from 2.66 million last November to approximately 130,282 today. Additionally, large-scale holders, often referred to as “whales,” have opted to remain inactive amid this downturn. Their inactivity could further exacerbate the decline, given their historic influence on Dogecoin’s price movements.
Potential for a Future Price Surge
Despite current market challenges, some analysts maintain an optimistic outlook for Dogecoin’s future. Crypto analyst Trader Tardigrade suggests that Dogecoin could still achieve the highly anticipated $1 price target. In a recent post, he indicated that the meme coin is mirroring the pattern observed during the 2017 bull run, suggesting readiness for another surge.
An accompanying analysis proposed that Dogecoin’s price could soar above $1.7 during this anticipated rally. Analyst DOGECAPITAL also supports this view, predicting that Dogecoin will reach $1.7 after the current consolidation phase. This prediction aligns with historical patterns where Dogecoin reached similar resistance levels.
Despite the ongoing downtrend, there is still speculation that Dogecoin could potentially reach as high as $10 in the current market cycle. This prediction is based on a parallel channel analysis, drawing comparisons to the bull cycles of 2017 and 2021.
As of the latest data, Dogecoin is trading at approximately $0.2, reflecting a nearly 2% decline over the past 24 hours, according to CoinMarketCap statistics.
