As an experienced crypto market analyst, I’ve seen my fair share of price fluctuations and funding rate changes in various digital assets, including Dogecoin. The recent decline in Dogecoin’s price and open interest, accompanied by a significant drop in the OI-weighted funding rate, is a clear indication of bearish sentiment among investors.
In simpler terms, Dogecoin, similar to other cryptocurrencies, experienced a price decrease over the past day that significantly affected its value. Yet, this reduction wasn’t just confined to pricing; the funding rate of Dogecoin’s derivatives market has also taken a noticeable dive in recent times.
Dogecoin OI-Weighted Funding Rate Crashes 50%
Over the past few days, as Dogecoin’s price surged, the OI-adjusted funding rate also climbed. This isn’t surprising, as the funding rate typically reflects market sentiment. When crypto investors are highly optimistic, the funding rate increases because long traders must compensate short traders to maintain their positions. Conversely, when sentiment turns bearish, funding rates decline, and short traders pay long traders to hold their positions.
The funding rates play a crucial role in maintaining equilibrium between contract and asset prices on exchanges, regardless of market volatility. These fees are imposed intermittently by different exchanges, with the frequency between each fee assessment differing among them.
As a crypto investor, I’ve observed that the decrease in Dogecoin’s Open Interest (OI) weighted funding rate indicates a growing bearish sentiment among investors. When Dogecoin reached a price of $0.17 on Thursday, the OI-weighted funding rate stood at 0.0243%. However, with the price retreating towards $0.16, the OI-weighted funding rate has now dropped significantly to 0.0105%, according to data from Coinglass.
As a crypto investor, I’ve experienced firsthand how quickly the sentiment towards a coin like Dogecoin can change, leading to a more than 50% decline from its Thursday figures. Yet, if Dogecoin’s price starts to bounce back, you can expect the open interest, as measured by the option implied volatility and open positions, to rise once again.
Open Interest Falls Alongside DOGE
As a crypto investor, I’ve noticed that the Dogecoin price drop has taken its toll on open interest as well. The open interest surged back up to nearly $1 billion on May 22, but it was short-lived. A sudden 10% crash brought the open interest down once more, now hovering around $900 million.
In the past day, there has been a significant decrease in Dogecoin’s open interest according to Coinglass data. This decline was most pronounced on Kraken, with a dramatic drop of 35.94% in open positions related to this cryptocurrency.
In the past day, a decrease of 18.57% was observed in dYdX’s open interest, while Coinbase experienced a decline of 11.36%. Other exchanges reported fluctuations between a 1.25% drop and a 7.4% decrease. In summation, the total open interest has decreased by 5.31%, amounting to approximately $907.8 million at present.
As a crypto investor, I’m keeping an eye on Dogecoin’s performance, and currently, its price stands at $0.1587. Unfortunately, there’s been a 4.59% decrease in the last 24 hours. A sad note to mention is that Kabosu, the beloved Shiba Inu dog who graces Dogecoin’s logo, has recently passed away.
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2024-05-25 06:11