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Dogecoin (DOGE) Prices Drop as Traders Bet Against Token, ‘Memecoin Summer on Hold,’ Some Say
The cryptocurrency market’s largest meme token is starting to attract short bets amid the meme industry’s overall decline, which could spell concern for the meme industry.
Coinalise the data shows that Dogecoin (DOGE) funding rates started to turn negative on Tuesday, reaching -0.0027% on Thursday, reaching levels previously seen in October 2023. Funding rates are periodic payments made by traders based on the difference between prices in the markets futures and spots.
While these rates are not unusually high, they indicate a bearish mood in the market when they continually decrease alongside a decline in prices. DOGE has lost 12% in the past week, erasing all its gains since March.
DOGE’s open interest, or the number of unsettled futures contracts, fell from nearly $800 million on Monday to $611 million on Thursday, also indicating a decline in demand for the token.
Rates briefly turned red in a few eight-hour trading sessions in March, but not for an extended period as seen so far this week.
Tokens through the meme coin industry recorded losses of up to 40% in a seven-day period as traders sense a shift from riskier tokens to bitcoin and stablecoins.
“When the price of Bitcoin drops, memecoins tend to not only follow, but lose an even larger share of their value,” Neil Roarty, an analyst at investment platform Stocklytics, shared in a Thursday email to CoinDesk . “Any plans for a memecoin summer may have to be put on hold.”
AS reported previously This week, DOGE futures traders recorded their worst day since May 2021, as the token saw $60 million liquidated in longs, unusually more than for bitcoin (BTC) futures.
These declines came as bitcoin (BTC) prices have suffered in recent weeks due to $2 billion in selling by large holders, net outflows from US-listed Exchange Traded Funds (ETFs) and the strength of the dollar.