Dogecoin
Dogecoin open interest nears record low: Is this the end of DOGE’s 2024 rally?
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- Dogecoin’s open interest has fallen sharply, reflecting reduced trader optimism and market activity.
- Recent price decline to $0.32 raises concerns about DOGE’s short-term recovery prospects.
In April, Dogecoin [DOGE] saw its open interest surge to a yearly high of $12 billion, only to experience a significant drop through to October. While there was a brief rebound earlier this month, OI is now on the verge of falling to its lowest level since 10th November.
This decline closely mirrors Dogecoin’s 20% price drop over the past week, raising questions about Dogecoin’s short-term outlook. What does this recent shift in market sentiment mean for DOGE’s future?
Dogecoin’s open interest plummets
Dogecoin’s open interest has plummeted to $1.42 billion, a stark contrast to its April peak of $12 billion. A sustained drop in OI, particularly during DOGE’s recent price decline to $0.32, points to traders unwinding positions amid reduced optimism.
Source: Santiment
This bearish trend in OI often indicates waning confidence in short-term price recovery.
Coupled with a 20% drop in DOGE’s price over the past week, the shrinking OI suggests traders are cautious about opening new positions, signaling potential for further correction unless market sentiment reverses.
MDIA signals stagnation and cautious sentiment
The MDIA indicates that Dogecoin holders are increasingly opting to hold rather than trade their assets.
MDIA, which tracks the average age of coins on a blockchain weighted by purchase price, has steadily risen to 335 days. This trend suggests long-term holders are not actively trading or reallocating their assets, pointing to stagnation within the market.
Source: Santiment
Historically, a rising MDIA has correlated with reduced liquidity and lower demand, often seen as a bearish signal.
If this upward trajectory persists, it underscores a lack of fresh capital or speculative activity in the DOGE market, aligning with its recent price declines. This supports the narrative of cautious sentiment dominating Dogecoin’s short-term outlook.
Dogecoin struggles below key support levels as bearish momentum dominates
On the daily chart, Dogecoin is struggling to reclaim critical support levels following its recent downturn.
The price has dropped below the $0.35 threshold, which previously acted as a significant support level, suggesting that bearish momentum continues to dominate.
Source: TradingView
The MACD indicator confirms this bearish outlook. At press time, the MACD line is positioned in negative territory, reflecting downward momentum. The histogram shows fading bearish pressure, but until a clear bullish crossover occurs, recovery prospects remain limited.
Read Dogecoin [DOGE] Price Prediction 2024-2025
If the bearish trend persists, Dogecoin could test the $0.27 support level in the near term. However, if buyers manage to push the price back above $0.35 and sustain momentum, a rebound toward the $0.48 resistance zone might be achievable.
This potential recovery hinges on increased volume and renewed buying pressure, both of which appear muted at the moment.
