Dogecoin Open Interest Stays Low Under $500M: What’s Happening?

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As the market begins to recover, there has been an uptick in open interest across major assets; however, Dogecoin appears to be an exception. The meme-inspired cryptocurrency has not demonstrated the same lively movement as other prominent assets like Bitcoin and Solana. Of course, the trends in open interest can influence Dogecoin’s price performance. So, what implications could this subdued open interest hold for the future price of the meme coin?

Dogecoin Open Interest Shows Lack of Movement

Data from Coinglass reveals that the Dogecoin open interest has once again not exceeded the $500 million mark. As of Thursday, the Dogecoin open interest stood at $493.97 million, significantly short of its all-time high. This comes despite the fact that the meme coin’s open interest experienced a 6.9% increase over a 24-hour period, with notable rises seen on platforms like OKX and Bitget.

Even with this uptick, the Dogecoin open interest remains well below its peaks from August. When August began, open interest was above $618 million. However, it has since stagnated, suggesting that traders in crypto have shifted their focus elsewhere.

Worryingly, the open interest is currently more than 70% lower than its all-time high recorded in March 2024. On March 29, 2024, the Dogecoin open interest reached a peak of $2.21 billion. Since that time, there has been a continuous decline. The latest figure of $498 million reflects a 77% drop from the March statistics.

Why This Decline May Favor DOGE

Open interest indicates the total volume of open options or futures contracts for a specific digital asset. It essentially allows investors to gauge whether traders are heavily betting on a cryptocurrency’s recovery or downturn.

The current data on Dogecoin suggests that interest among traders is not what it once was. However, this does not necessarily spell trouble; periods of diminished open interest have often coincided with market bottoms. Low open interest could present a favorable opportunity for investors to buy in, as prices may tend to drop alongside open interest. Should Bitcoin continue its recovery, Dogecoin is likely to follow suit, and a resurgence in open interest could lead to rapid increases in DOGE’s price.

A similar situation unfolded in January 2024 when open interest hovered around $300 million, marking a low point. Over the following months, open interest surged by over 630%, fueling a price increase of more than 100% for Dogecoin.

If this pattern re-emerges, we could see the DOGE price double again, solidifying levels above $0.2, particularly with a bull market anticipated for the final quarter of the year.