Open interest in Dogecoin has plummeted to $1.42 billion, in stark contrast to the peak of $12 billion in April. The continued decline of OI, especially during the recent price drop of DOGE to $0.32, indicates that traders are unwinding positions amid diminishing optimism.
The bearish trend of OI often indicates a decline in confidence in the short-term price recovery. Along with the 20% drop in DOGE price over the past week, the narrowing OI shows traders are being more cautious when opening new positions, signaling the potential for further correction unless market sentiment reverses.
MDIA Signals Stagnation and Cautious Sentiment
MDIA indicates that Dogecoin holders are increasingly opting to hold rather than trade their assets.
MDIA, which tracks the average age of coins on the blockchain calculated by purchase price, has steadily risen to 335 days. This trend indicates that long-term holders are not actively trading or reallocating their assets, pointing to stagnation in the market.
Traditionally, an increase in MDIA is often accompanied by reduced liquidity and lower demand, typically viewed as a bearish signal.
If this upward trajectory continues, it highlights the lack of new capital or speculative activity in the DOGE market, consistent with its recent price decline. This supports the narrative of cautious sentiment dominating Dogecoin's short-term outlook.
Dogecoin Struggles Below Key Support Level as Downtrend Prevails
On the daily chart, Dogecoin is attempting to reclaim important support levels after the recent price drop.
The price has dropped below the $0.35 threshold, which was previously a key support level, indicating that bearish momentum continues to prevail.
The MACD indicator confirms this bearish outlook. At the time of reporting, the MACD line is in the negative territory, reflecting the downtrend. The histogram shows that bearish pressure is waning, but until a clear bullish crossover occurs, the recovery outlook remains limited.
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