With the market recovery, open interest in major assets has been rising, but it appears Dogecoin is not following this trend. The meme coin has remained quiet and failed to move like other large-caps such as Bitcoin and Solana. Naturally, the direction of open interest could have an impact on Dogecoin’s price performance. So, what could this quiet open interest mean for the meme coin’s price in the future?
Dogecoin open interest does not change
According to data from the Coinglass website, the Dogecoin Open Interest Failed to Break $500 Million Level again. As of Thursday, Dogecoin’s open interest stood at $493.97 million, which is a far cry from its all-time high. This comes even as the meme coin’s open interest has increased by 6.9% over the past 24 hours, with notable jumps on cryptocurrency exchanges such as OKEx and Bitget.
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Despite this surge, Dogecoin’s open interest is still firmly below August highs. Open interest began August above $618 million. However, it has remained quiet since then, 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, the Dogecoin Open Interest reached a new peak of $2.21 billion. But since then, open interest has been on a steady decline. With Thursday’s figure of $498 million, DOGE’s open interest is now down 77% from March’s figure.
Why this decline could be good for DOGE
Open interest provides the total open interest of options or futures contracts in the market for a particular digital asset. It basically helps investors know whether traders are betting heavily on a cryptocurrency’s recovery or decline or not.
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Given Dogecoin’s data, this shows that traders aren’t exactly as focused on the meme coin as they used to be. However, this isn’t always a bad thing, as periods of low open interest have often marked market lows. Low open interest often gives investors a good time to get into the coin, as the price usually falls with open interest. As the price of Bitcoin recovers, the price of Dogecoin is expected to follow, and when open interest starts to recover, the DOGE price is expected to grow rapidly therefore.
A similar scenario was witnessed in January 2024, with open interest marking a low of around $300 million. However, in the coming months, the open interest increased by more than 630%, causing the price of Dogecoin to increase by over 100%.
If the same scenario happens here, then DOGE price may double once again. This would put the price firmly above the $0.2 level, especially with a bull run expected in the last quarter of the year.
Featured image created with Dall.E, chart from Tradingview.com
