Dogecoin Price Analysis: DOGE Open Interest Crosses $3.5B as Trump Inauguration Nears

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On January 12, Dogecoin‘s price remains pinned below $0.35, as uncertainty lingers over market sentiment. Data from derivatives markets indicates that Dogecoin traders are hesitant to wrap up their positions, given that the inauguration of former President Trump is now just a week away.

Dogecoin price consolidates at $0.35 as traders await further clarity

On January 12th, Dogecoin (DOGE) is continuing to experience pressure as its price stabilizes around $0.33. This movement in price mirrors broader apprehensions within the market, with factors such as FTX liquidations and speculation about a potential U.S. government auction of Bitcoin seized from the Silk Road case causing unease among investors.

Between January 5 and January 9, the price of Dogecoin saw a significant fall of around 18%, going from approximately $0.39 to $0.32. This decline coincided with increased market selling. Despite this, Dogecoin experienced a small recovery of about 5%, reaching $0.35 before meeting resistance. As we speak, the price has dipped slightly back down to around $0.33, indicating that traders are still wary about investing in long positions due to ongoing uncertainties.

Dogecoin Open Interest Crosses $3.5B as Traders take fresh Positions ahead of Trump Inauguration

Even though Dogecoin’s prices have been relatively stable recently, indications point towards strategic investors making speculative bets in anticipation of bullish signals linked to upcoming events. As evidence, the Coinglass Open Interest chart below illustrates the amount of capital currently invested in unresolved DOGE futures contracts.

Over the last three days, the Doge coin’s value has climbed by 7%, rising from $0.31 to $0.33. Yet, the Open Interest has surged a more substantial 9.5%, jumping from $3.24 billion to $3.55 billion. This significant gap between the price rise and the increase in Open Interest indicates that traders are increasingly making leveraged bets on potential price hikes, rather than selling off their positions due to the recent price stability.

The primary factors fueling the rise in speculative investments are the recently launched Department of Government Efficiency (D.O.G.E.) program and Elon Musk’s ongoing role within Trump’s administration. As inauguration day, January 20th, approaches one week from now, this 9.5% increase in Open Interest suggests that traders are becoming more optimistic, as both long and short positions are being aggressively established in preparation for a potential surge in volatility.

If the risky investments line up with a positive market reaction following Trump’s inauguration, Dogecoin (DOGE) might burst out of its price range around $0.35, indicating a potential increase in value.

DOGE Price Forecast: $0.40 Breakout Potential Hinges on Key Indicators

As Trump’s inauguration draws closer, predictions for Dogecoin suggest optimism. At present, Dogecoin is gathering strength around the $0.34 mark, and traders are watching the upper boundary of the Bollinger Band (BB) at $0.39 closely as a significant barrier to further rise.

The width of the BB indicates less price fluctuation, potentially signaling that Dogecoin is preparing for a significant price movement. With trading volume at approximately 456.11 million and a slight uptick in the Bull-Bear Power (BBP) indicator to -0.01235, there are signs of improving market sentiment following Dogecoin’s recent drop and subsequent 7% increase.

If Dogecoin continues to gather speed beyond its current Volume Weighted Average Price (VWAP) of $0.3395, it could lead to an optimistic outcome. This momentum might push DOGE up against the resistance at $0.39 and may even set the stage for a surge towards $0.40.

A rise in the trading volume and a bullish trend in BBP would support this upward movement, coinciding with market enthusiasm about upcoming events. Conversely, a downturn below $0.33 with decreasing trading volume might lead to renewed selling pressure, possibly causing another test of the lower boundary at $0.28 for DOGE. For DOGE to prevent a bearish reversal, it needs to maintain its current consolidation.

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2025-01-12 20:59