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As the market recovers, open interest for major assets is increasing, but Dogecoin does not seem to follow this trend. The meme coin has remained stagnant, not moving like other large-cap stocks such as Bitcoin and Solana. Naturally, the direction of open interest can affect the performance of Dogecoin price. So, how will this stagnant open interest affect the price of the meme coin going forward?
Dogecoin open interest not moving
According to data from the Coinglass website, Dogecoin open interest has once again failed to surpass $500 million. On Thursday, Dogecoin open interest stood at $493.97 million, far from its all-time high. This came even as the meme coin’s open interest surged by 6.9% in 24 hours, with notable gains seen on exchanges like OKX and Bitget.
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Despite this increase, Dogecoin open interest is still well below its August high. Open interest started August at over $618 million. However, it has remained flat since then, suggesting that crypto traders are turning their attention elsewhere.
Even more concerning is the fact that open interest is now over 70% below its all-time high in March 2024. On March 29, 2024, Dogecoin open interest reached a new all-time high of $2.21 billion. However, open interest has been steadily declining since then. At Thursday’s figure of $498 million, DOGE open interest is now down 77% from its March figure.
Why This Drop Is Good for DOGE
Open interest refers to the total amount of open options or futures contracts in the market for a particular digital asset. It basically allows investors to see whether traders are betting heavily on a recovery or decline in the cryptocurrency.
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Looking at the data for Dogecoin, we can see that traders are not as focused on meme coins as they used to be. However, this is not always a bad thing, as periods of low open interest often indicate a market bottom. Low open interest usually provides investors with a good time to invest in a coin, as the price often falls along with open interest. As the Bitcoin price recovers, the Dogecoin price is expected to recover as well, and as open interest begins to recover, the DOGE price is expected to grow rapidly as well.
A similar scenario was witnessed in January 2024, when open interest hit a floor of around $300 million. However, in the following months, open interest rose by over 630%, causing Dogecoin’s price to surge by over 100%.
If the same scenario plays out here, the DOGE price could double again. This would certainly push the price above the $0.2 level, especially as the bull market is expected to continue in the last quarter of this year.
Featured image made with Dall.E, charts from Tradingview.com