Dogecoin’s open interest is flat, regardless of the general market recovery, failing to follow the uptrend seen in other major assets.
Old dog
Dogecoin’s open interest has been unable to surpass the $500 million level. On Thursday, it stood at $493.97 million, a far cry from its ATH.
Yes, he open interest saw a 6.9% increase in the past 24 hours, with bigger-ish jumps on exchanges, but it remains below its August highs.
The open interest started August above $618 million but since then, it declined, suggesting that crypto traders have shifted their focus elsewhere.
The situation is even more concerning when compared to Dogecoin’s ATH open interest of $2.21 billion recorded on March 29.
At Thursday’s figures of $498 million, the open interest has declined by a painful 77% from its March levels.
Okay, but what will be the Dogecoin price?
Open interest represents the total number of open options or futures contracts in the market for a particular asset, and it helps investors decide whether traders are heavily betting on a crypto’s recovery or decline.
It’s kind of a sentiment indicator, we can say this. Dogecoin’s data shows that traders aren’t as focused on the meme coin as they once were.
Of course, this isn’t necessarily a negative development, as periods of low open interest have often marked market bottoms in the past, thus, good buying opportunity. Low open interest typically provides a good entry point for investors, as the price often declines along with the open interest.
As the Bitcoin price recovers, it is expected that Dogecoin’s price will follow suit, and when the open interest begins to recover, the DOGE price will grow too.
Dogecoin price growth
A similar case was observed in January, when the open interest bottomed out around $300 million.
Over the next few months, the open interest skyrocketed by more than 630%, triggering a price jump of over 100% for Dogecoin.
If a comparable scenario plays out this time, the DOGE price could do a 2x, pushing it well above the $0.2 level, especially with a bull run expected in the last quarter of the year.
If Dogecoin’s open interest remains low, like now, it could signal a prolonged period of price consolidation or even a decline.
But if the open interest finally starts to recover and approach its previous highs, it could signal renewed investor interest and maybe even a price recovery.
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