Memecoins
Traders favor Dogecoin as Bitcoin stagnates
- Bitcoin price has stabilized above $67,000, but traders are now focusing on memecoins.
- Dogecoin’s open interest has decreased, indicating bearish sentiment.
Since May 23, the price of Bitcoin has remained stable above $67,000, but traders are increasingly turning to memecoins such as Dogecoin (DOGE). This change comes in anticipation of a potential excess supply of the Mont Gox Exchange. Despite some gains in related tokens, Dogecoin’s immediate outlook remains uncertain.
According to QCP Capital, a Singapore-based crypto trading company, traders have shown increased interest in high-beta meme tokens like Shiba Inu (SHIB), Dogecoin (DOGE), and Pepe (PEPE). These tokens have seen notable double-digit gains, ranging from 10% to 20%, ranking among the highest in terms of open interest (OI).
A recent analysis of Coinanalyze reported that PEPE and FLOKI experienced significant increases in IO over the past 24 hours. However, Dogecoin’s OI continued to decline, dropping by around 5% at the time of writing. This drop suggests bearish sentiment among traders and could delay a strong near-term recovery for DOGE.
Open Interest Trends and Market Sentiment
Open interest (OI), which monitors the number of open futures contracts, is essential market sentiment indicators. A rising OI generally signals bullish expectations, while a falling OI indicates bearish sentiment. Since May 27, Dogecoin’s OI has been in a downward trend, falling below $900 million. This decline highlights a lack of confidence in DOGE’s price potential among market participants.
Additionally, the cumulative volume delta (CVD) for DOGE has been on a downward trend since May 27, further indicating that sellers are currently dominating the market. These indicators suggest that Dogecoin is facing significant selling pressure.
Dogecoin is currently trading at $0.16 with a slight 24-hour increase of 0.12%. This represents an impressive 185x increase from its all-time low of $0.0000869, according to CoinGecko data. DOGE recently I saw a slight correction, trading at 0.00000235 after a decline of 0.0000255. Key support for this pair is provided by the 200-day exponential moving average (EMA) and an ascending trendline.
On the resistance front, Dogecoin’s upward movement is limited by the confluence of the 20-day EMA and the 50-day EMA. The RSI (Relative Strength Index) is currently below the midline in the neutral zone, suggesting a bearish divergence.
Bitcoin Struggles Amid Volatility
Bitcoin has faced difficulties in establishing a clear uptrend. The cryptocurrency surged to $72,000 last week, fueled by excitement over the approval of Ethereum ETFs. However, this was followed by a correction, with Bitcoin price stands at $68,723, reflecting an increase of 0.8% in the last 24 hours. Market volatility and lack of investor confidence contributed to this correction.
The crypto market is expected to experience increased volatility as the United States releases its Personal Consumption Expenditure (PCE) inflation data. This data is critical because it will provide insight into the Federal Reserve’s future interest rate movements. Economists predict the first interest rate cut will come in September, although some are hoping for an earlier cut in June. The Fed aims to return U.S. inflation to the target rate of 2%, a goal that remains a challenge.
Bitcoin’s ability to emerge from the current slump and surpass $70,000 depends on these economic indicators. A successful breakout could trigger fear of missing out (FOMO) among investors, potentially pushing Bitcoin’s price towards $80,000.