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Dogecoin Open Interest Nears Record Low: Is This the End of DOGE’s 2024 Rally?
Dogecoin (DOGE) has been on a rollercoaster ride in recent times, with its open interest plummeting to near record lows. The latest development raises serious concerns about the cryptocurrency’s short-term outlook.
In April, Dogecoin saw a surge in open interest, reaching a yearly high of $12 billion. However, this momentum was short-lived as the market experienced a significant drop through October and then briefly rebounded earlier this month. Unfortunately, the recent downtrend has led to an impending decline in OI that is unprecedented.
The latest numbers have seen Dogecoin’s open interest fall to $1.42 billion, a stark contrast to its April peak. This steep decline directly correlates with the cryptocurrency’s 20% price drop over the past week, leaving traders wary about opening new positions and indicating potential for further correction unless market sentiment reverses.
It is no secret that the crypto space has been witnessing an intense bearish trend in recent times. The MDIA indicator, which tracks the average age of coins on a blockchain weighted by purchase price, has steadily risen to 335 days. This development highlights long-term holders are not actively trading or reallocating their assets, resulting in stagnation within the DOGE market and ultimately pointing towards reduced liquidity and lower demand.
Historically, such an upward trajectory in MDIA has been linked with diminished fresh capital inflows or speculation in DOGE’s market, aligning with its recent price declines. As a result, cautious sentiment seems to dominate Dogecoin’s short-term forecast.
The daily chart of Dogecoin displays a picture of struggle below crucial support levels following its latest downturn. The cryptocurrency has dropped beneath the $0.35 threshold, which served as a significant support level in the past. This suggests that bearish momentum continues to define DOGE’s behavior.
It is worth noting that MACD indicators also point towards this negative sentiment, with the MACD line currently situated in unfavorable territory and exhibiting fading bearish pressure but not yet indicating a change in direction.
Source: ambcrypto.com
