Key Insights
- Dogecoin price holds the support level of $0.20.
- The Open Interest has dropped by 67% in the past three months.
- DOGE price has grabbed the liquidity below the $0.20 level.
Dogecoin (DOGE) price saw heavy selling pressure in November and rewarded investors with a 166% return. The token’s recent decrease has traders on edge, waiting to see how the market reacts.
Market experts established substantial short bets as the DOGE price fell by more than 40% last month. While some market analysts expect more volatility, others see a long-term increase in price trends.
Massive Drop in DOGE Open Interest Noticed: Can It Affect Dogecoin Price?
Furthermore, a sharp drop in open interest (OI) in the futures market has coincided with drops in Dogecoin price. Glassnode reported that open interest has fallen 67% over the last three months. It declined from $4.07 Billion in December to $1.33 Billion today.
Open interest is frequently used as a gauge of market sentiment since it counts all the contracts still open in derivatives markets. A decline in open interest suggests that traders are less inclined to maintain leveraged positions on DOGE.
This may signify diminished confidence in the company’s immediate price recovery. Such a decline is typically associated with waning investor interest and declining trading volumes.
Sellers Look Stronger: Can DOGE Price Plunge More?
When writing, DOGE price was trading at $0.2042, which has increased by 10% in the past 24 hours. The market capitalization was $30.27 Billion, and the 24-hour trading volume was $1.83 Billion.
The technical chart shows that since December, sellers have continued to dominate. Dogecoin price has lost numerous support levels amid this bearish trend. Customers may become fearful of this.
Sellers may gain the upper hand if the DOGE price stays below the $0.20 immediate support level. Furthermore, the token is anticipated to fall to a critical level of $0.15 amid this selling pressure.
The selling pressure may intensify if the price falls below this mark. However, if the Dogecoin price of the digital asset rises and reaches $0.20 again, buyers may pay attention.
The trend might change to bullish if the price of this memecoin breaks above the 200-day EMA. A huge bull run might also be seen if the trading volume sustains this momentum.
Dogecoin Price Analysis Amid Declining Open Interest
At press time, Dogecoin price was facing significant selling pressure. With this, its price rested at a critical support level of $0.20.
The substantial drop in open interest indicated a reduction in trader confidence. This could further have implications for the price trajectory of DOGE.
Analysts remain divided. Some are warning of potential further declines. The token could possibly reach $0.15, especially if the bearish trend continues.
On the other hand, a rebound above $0.20 and a sustained increase in trading volume could signal a shift toward a bullish trend. Investors must closely monitor these key levels and sentiment indicators as the market remains volatile to negotiate the unpredictable terrain ahead.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
