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Dogecoin No Longer Aiming for the Moon as Open Interest Shrinks by $458 Million
Victor Olanrewaju8 October 2024, 17:00 GMT+0000
Two weeks ago, Dogecoin (DOGE) price was $0.13, driving speculation that the meme coins could be circling back to its yearly high. But in the last seven days, Dogecoin’s ambitions of hitting that value have been waning as its price decreased by 8.86%.
This shift raises concerns among DOGE investors who had initially thought the uptrend would erase the losses they have endured for months. Contrary to those expectations, this analysis reveals that the cryptocurrency may keep swinging lower before any major breakout.
Dogecoin Investors Ditch the Coin for Now
On Monday, October 7, Dogecoin’s Open Interest was $1.35 billion. Open Interest refers to the total sum of all open positions or contracts in the market. Technically, the OI, as it is commonly called, measures speculative activity.
When the OI increases, buyers are aggressive and are pumping more money into the contracts. A decrease implies that sellers have the advantage and are increasingly closing existing positions.
Today, DOGE’s OI has plummeted to 801.99 million, indicating that traders removed about 458 million from contracts related to the cryptocurrency within the last 24 hours. From a price perspective, this massive decline suggests that Dogecoin’s price is likely to dump into the underlying support.
At press time, Dogecoin’s Large Holders Netflow has significantly fallen after rising to an impressive height on October 4. This netflow measures the percentage difference between the value of coins whales bought and sold.
When it rises, it means crypto whales have bought more coins within a certain period. A notable decline in DOGE’s situation suggests that most large investors sold and put downward pressure on Dogecoin’s price.
DOGE Price Prediction: Bullish Narrative Fades
A look at the daily DOGE/USD chart shows that the coin has formed a head-and-shoulders pattern. This pattern indicates that an upward trend is nearing its end and is a notable bullish-to-bearish reversal.
As seen below, Dogecoin’s price is $0.10, exactly at the neckline of the pattern. The trading volume also shows fluctuations, but notably, selling activity outpaces buying pressure. Due to this position, Dogecoin’s price is likely to drop to $0.093. If the price breaks below this level, it could decline to $0.080.
Read more: How To Buy Dogecoin (DOGE) and Everything You Need To Know
If investors hold onto their DOGE instead of selling, the coin could gradually rise, provided buying pressure increases. In this scenario, Dogecoin may see a price jumpto $0.15.
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