Will Dogecoin Open Interest Rise After DOGE Price Correction?
In April, Dogecoin (DOGE) open interest reached a yearly high of $12 billion, but fell significantly between that peak and October. The index rose again earlier this month but is now on the verge of falling to its lowest level since Nov. 10.
What is commonly referred to as the decline in OI is consistent with the price action of DOGE, which has fallen 20% in the past seven days. So, what’s next for cryptocurrencies?
Dogecoin traders reduce risk exposure, investors cautious
Currently, Dogecoin’s open interest has dropped to $1.42 billion. OI represents total open interest (long or short) futures Or the options market at any given time. Rising OI indicates new position are being added, reflecting greater engagement and confidence in cryptocurrency price movements.
Conversely, a decline in this indicator reflects position unwinding, indicating a decline in trader confidence or a neutral outlook for the asset. therefore, DOGE’s OI dropped significantly This indicates that traders do not expect good gains from short-term price movements.
If this trend continues, the cryptocurrency’s value could see a long-term correction as the price of Dogecoin falls to $0.32.
Mean Dollar Investment Age (MDIA) is another indicator pointing to further declines in Dogecoin price. As the name suggests, MDIA is the average age of all tokens on the blockchain weighted by purchase price.
When MDIA rises, it indicates that holders are holding their tokens in their wallets without actively trading them. This indicates stagnation and is generally considered bearish. A drop in MDIA indicates that a previously dormant coin is moving, meaning increased activity or trading. This is usually considered bullishas it may indicate new interest and liquidity
According to Santiment, Dogecoin’s 90-day MDIA has increased, indicating that holders have largely kept their coin stagnant. If sustained, this would support Bearish outlook for cryptocurrencies.
DOGE Price Forecast: The correction is not over yet
On the daily chart, DOGE continues to lose control at key support levels. Notably, the coin fell below the $0.35 support area as bulls failed to hold the area. Moving Average Convergence Divergence (MACD) also supports this decline.
MACD measures momentum. When the reading is positive, momentum is bullish. But if it is negative, the reading is bearish. As shown in the chart below, the MACD reading is in negative territory. If it remains unchanged, the price of Dogecoin could drop to $0.27.
On the other hand, this trend may change if the bulls regain the $0.35 support and successfully defend it. In that scenario, DOGE could rebound to $0.48.
Disclaimer
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