Last week, Dogecoin (DOGE) experienced a sharp 20 percent drop, which led to open interest (OI) levels falling to their lowest levels since November 10.
In April, DOGE open interest reached a yearly peak of $12 billion, but a significant decline occurred until October. Although a brief recovery was observed earlier this month, OI levels are now on a downward trend. The decline in Dogecoin price and the decreasing open interest indicate that investors are more cautious and that the short-term bullish expectations are weak. Currently, Dogecoin open interest has fallen to $1.42 billion. OI refers to the total of long or short positions open in the futures or options markets.
An increase in OI indicates that new positions are being opened and traders are becoming more confident in the price action. However, a decrease in OI indicates that positions are being closed and traders are becoming cautious about the token.
This sharp decline in DOGE open positions suggests that investors do not expect a price increase in the short term. If no increase is observed in OI data, selling pressure on Dogecoin is likely to continue. When the daily DOGE chart is examined, it is seen that important support levels have been lost one after another. In particular, the drop below $0.35 has started to cause panic among investors.
Another indicator that supports this decline is the Moving Average (MACD) indicator. While the MACD measures market momentum, positive values indicate upward momentum and negative values indicate downward momentum. Analysts and traders often use the MACD as an indicator in buy-sell decisions.
Currently, the MACD indicator is trading in the negative territory for Dogecoin. If this situation continues, the price may decrease to $0.27. However, if it stays above $0.35, the price can be expected to rise towards $0.48.