The price of Dogecoin (DOGE) is experiencing a decline today as the broader cryptocurrency market undergoes a significant correction. Over the past 24 hours, DOGE’s price has dropped by more than 5.5%, reaching an intraday low of $0.1712 on April 3. This underperformance is in comparison to the crypto market, which has fallen by around 0.17% during the same period. The decline in DOGE’s price follows a correction in Bitcoin (BTC), which has seen a retreat of nearly 7.7% in the past two days.
Taking a closer look at the reasons behind Dogecoin’s latest pullback, it is observed that DOGE’s open interest has dropped below $2 billion. Recently, DOGE has seen significant gains, rising over 11% between March 23 and March 28. However, its price turned downward on March 29 and is currently trading 5.5% lower than its value a week ago. This decline aligns with a decrease in futures open interest (OI). Data from Coinglass reveals that DOGE’s OI has fallen by 27.6% from $2.21 billion on March 28 to its current value of $1.60 billion. Additionally, the funding rate for Dogecoin perpetual futures contracts has also reduced from 0.107% to 0.021% during the same period. These reductions in funding rates and OI indicate a bearish sentiment among traders, suggesting expectations of lower prices for DOGE.
Furthermore, the recent correction in the cryptocurrency market has been supported by whale activity, which has had a bearish impact on Dogecoin. Whale transactions, involving transfers of $100,000 or more worth of DOGE, have increased by over 20% in the past seven days for transactions worth between $100,000 and $1 million. Likewise, the number of DOGE transactions larger than $1 million has surged by over 200% in the last 30 days. This increase in whale activity indicates that long-term holders of DOGE are now in profit after the rally in March and are now cashing in, validating the ongoing correction.
In addition, Dogecoin’s drop today is accompanied by a growing bearish divergence between its price and the relative strength index (RSI). While DOGE’s price formed higher lows between March 28 and March 31, its daily RSI dropped, forming lower lows. According to technical analysis, this divergence suggests weakness in the prevailing uptrend, prompting traders to secure profits at local price highs.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions, as every move in the market involves risk.