Dogecoin's relative strength index (RSI) is approaching overbought levels, signaling a potential price correction. However, analysts say there is still room for short-term growth. Meanwhile, Bonk's RSI remains neutral, reflecting its recent downtrend.
Increased speculative activity in derivatives for both meme coins is sending mixed signals. Amid these developments, analytics platform Santiment has issued a warning, suggesting that a correction could be imminent.
Santiment: Focus on Meme Coins Brings Caution
The cryptocurrency market has performed remarkably well this week, with several meme coins experiencing significant price increases reminiscent of their past highs, The Bit Journal reports. One such coin is Dogecoin (DOGE). However, despite the recent surge, market analysts are warning of a possible reversal for these speculative assets.
Santiment, a market intelligence platform, has reported a significant increase in discussions around meme coins such as Dogecoin and Bonk (BONK). This surge coincides with their price increases, attracting the interest of traders. However, experts warn that when the market's focus shifts to speculative assets such as meme coins, corrections are often expected. In this context, Santiment commented:
âWhen coins like Dogecoin and Bonk are rising, we often see a surge in meme coin discussions. Typically, when focus shifts from first-layer protocols to more speculative assets driven by greed, corrections occur. Itâs no surprise that todayâs market-wide decline is happening.â
Mixed Signals From Dogecoin Derivatives
Dogecoin's RSI is currently at 69.17, approaching the overbought level of 70, indicating a key point where the price could be about to correct. However, with the RSI slightly below 70, analysts believe there is still room for upside. Market participants should keep a close eye on any signs of bearish momentum.
The meme coin derivatives market presents a mixed picture. Volume fell 28.05% to $2.61 billion, while open interest fell 4.12%. However, options trading surged 542.20%, and open interest in options increased 46.08%, signaling increased speculative activity. Long positions remained dominant on exchanges such as Binance and OKX, reflecting the overall bullish sentiment. However, significant liquidation of short positions was observed, along with a recent increase in liquidation of long positions over the past 12 hours.
Bearish Signals from Bonk Derivatives
Bonk is also showing signs of cooling off, currently trading at $0.000023. The meme coin is down 9.59% over the past 24 hours, with a trading volume of $263.41 million. Bonk's RSI is at 55.12, indicating neutral to slightly bullish sentiment. Despite the price drop, momentum has not yet moved into oversold territory, suggesting that the recent downtrend may soon stabilize.
In the derivatives market, Bonk is showing a more bearish trend. Volume has decreased by 21.58% to $98.63 million and open interest has decreased by 11.90% to $9.33 million. The buy/sell ratio is at 0.8932, indicating a slight bearish trend. However, on Binance, the buy/sell ratio is at 1.31, indicating more optimism among traders on the platform. Notably, significant liquidation of long positions in the past 12 hours has increased the possibility of a market correction.
