Originally published on: November 25, 2024
Dogecoin’s futures open interest reached an unprecedented $4.6 billion on November 23, marking a significant uptick in leverage demand. Despite DOGE trading 35% below its peak in May 2021, the 224% rally from November 3 to 23 has traders questioning if this surge could indicate a potential cycle top.
In the past, sharp increases in DOGE open interest have led to forced liquidations and price corrections. However, the current funding rate for leveraged long positions in DOGE sits at a neutral 2%, suggesting a balanced market despite the recent surge in interest.
While DOGE has seen a 161% increase in price, it lags behind other altcoins like Stellar, Cardano, and XRP. The drivers behind this surge are unclear, with some speculating that Elon Musk’s involvement with his “D.O.G.E.” initiative could be influencing the market.
As Dogecoin continues to be driven by its unique community and playful mascot, the sharp rise in open interest may not immediately lead to liquidations as long as leverage remains in check. Keep an eye on this market as it continues its volatile journey.
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