Dogecoin Open Interest Maintains Record Highs, Is A Crash Coming?
15 March 2024 - 9:00AM
NEWSBTC
The Dogecoin open interest rose to a new all-time high earlier in
March, and while there has been a small retracement, the open
interest has continued to maintain very high record levels since
then. Given this continuous high level, it could point to where the
price of the meme coin is headed next using historical data.
Dogecoin Open Interest Maintains High Level Open interest is a
measure of the total number of futures or options contracts of a
particular coin in the market at a give time. It can help to tell
how much money is flowing into that particular asset, thereby
revealing if there a high or love interest in the asset. Related
Reading: Bitcoin Whales Are Cashing Out Amid Push To New All-Time
High On Dogecoin’s part, its total open interest has been rising
over the last few months, especially as the crypto market
recovered, as shown by data from Coinglass. A natural consequence
of this was that the price was also climbing at the same time as
the open interest and thus, there is a high correlation between
open interest and price. The DOGE open interest hit a new all-time
high of $1.47 billion on March 5, and the meme coin has not looked
back since. Despite a small decline in the following days, the open
interest is rising once again, reaching $.144 billion on March 14
and taking the price with it. While the rise in open interest does
point to a lot of bullishness in the market, historical performance
during times like these also calls for caution. Taking a look at
what happened the previous times that the Dogecoin open interest
hit new all-time highs could give an idea of where the price is
headed next. Where Can DOGE Go From Here? Over the years, there
have been various points at which the Dogecoin open interest has
reached new all-time highs and a trend has emerged, in a manner of
speaking. Looking as far back as 2021 when the open interest hit
ATHs multiple time, this trend plays out similarly. A sustained
rise until a new all-time high is reached, with the price rising
along, and then followed by a crash in open interest, as well as
price. This was the case in September 2021 when the open interest
reached a new all-time high and then again in November 2021 when it
clocked another ATH. Related Reading: Samson Mow Gives Reasons Why
Bitcoin Price Could Reach $1 Million This Year Moving forward, the
same trend is seen in October 2021 when the DOGE open rose close to
its previous all-time high, but ended the same way as the previous
ones – with a crash. These crashes almost always affect the DOGE
price as well, causing it to drop to the levels before the surge in
open interest. If this pattern holds this time around, then a crash
might be ahead for the Dogecoin open interest and the DOGE price by
extension. A likely scenario is a 20% drop that could send the DOGE
price back toward $0.15 before the crypto market picks up steam
once again. DOGE bulls hold up price | Source: DOGEUSDT on
Tradingview.com Featured image from Decrypt, chart from
Tradingview.com
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