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With the market recovery, open interest in major assets has been rising. However, it seems Dogecoin is not following this trend. The meme coin has remained muted, failing to move like other large caps such as Bitcoin and Solana. Naturally, the direction of open interest can impact Dogecoin’s price performance. So, what could this muted open interest mean for the meme coin’s price going forward?
Dogecoin Open Interest Fails To Move
According to data from the Coinglass website, Dogecoin open interest has failed to surpass the $500 million level once again. On Thursday, Dogecoin’s open interest was $493.97 million, a long way from its all-time high. This comes even as the meme coin’s open interest surged 6.9% in a 24-hour period, with notable jumps across crypto exchanges such as OKX and Bitget.
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Despite this increase, Dogecoin open interest is still firmly below its August highs. Open interest started out in August above $618 million. However, it has since remained muted, suggesting that crypto traders have turned their attention elsewhere.
Even more concerning is the fact that open interest is more than 70% below its all-time high from March 2024. On March 29, 2024, Dogecoin open interest reached a new peak of $2.21 billion. But since then, open interest has been steadily declining. At Thursday’s figures of $498 million, DOGE open interest is now seeing a 77% decline from its March figures.
Why This Decline Could Be Good For DOGE
Open interest measures the total number of open options or futures contracts in the market for a particular digital asset. It helps investors determine if traders are heavily betting on the recovery or decline of a cryptocurrency.
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Given Dogecoin’s data, it shows that traders are not as focused on the meme coin as they used to be. However, this is not always a bad thing, as periods of low open interest have often marked market bottoms. Low open interest usually provides investors with a good time to enter into the coin, as the price often declines with the open interest. As Bitcoin price recovers, it is expected that Dogecoin price will follow. When open interest begins to recover, DOGE price is expected to grow rapidly with it.
A similar scenario was witnessed back in January 2024, with open interest marking a bottom around $300 million. Over the next few months, open interest rose more than 630%, triggering an over 100% price surge for Dogecoin. If the same scenario plays out here, DOGE price could double once more. This would place the price firmly above the $0.2 level, especially with a bull run expected in the last quarter of the year.
Conclusion
In summary, while Dogecoin’s open interest has remained muted compared to its previous highs, this could present a strategic entry point for investors. Historically, low open interest periods have paved the way for significant price increases. With the broader market showing signs of recovery, Dogecoin could potentially follow suit, presenting lucrative opportunities for those who invest wisely.
