Why is Dogecoin down today?
The price of Dogecoin (DOGE) decreased today due to the sharp correction of the broader crypto market.
The price of DOGE fell by more than 5.5% in the last 24 hours to $0.1712, the intraday low on April 3, which underperformed the crypto market, which fell by around 0.17% during the same period. The price of memecoin followed a correction in Bitcoin (BTC), which saw a retreat of about 7.7% in the last two days.
Let's take a closer look at the possible reasons behind Dogecoin's recent pullback.
Dogecoin open interest drops below $2 billion
DOGE posted a recent high, up more than 11% between March 23 and March 28. The price fell on March 29 and is currently trading 5.5% below the price of a week ago.
DOGE's decline over the past seven days has coincided with a decline in futures open interest (OI). According to data from Coinglass, DOGE OI fell 27.6% to $1.60 billion from $2.21 billion on March 28.
Additionally, the funding rate for Dogecoin perpetual futures contracts decreased from 0.107% to 0.021% over the same period.
Depreciation and OIA suggest that traders generally expect prices to fall as they bear the continued direction of assets.
This negative sentiment can lead to additional selling pressure, which can reduce the value of the property if other market conditions align. This is what Doge's downward spiral looks like today.
Related: The second phase of the crypto bull market is about to begin, says a chain analyst
Well movement supports the DOGE correction
After a recent market-wide correction that left millions of dollars behind, DOGE is down as low as $0.1712 and is currently down 5% on the weekly timeframe. However, increasing whale activity is a bearish signal for Dogecoin.
Whaling transactions are large transactions involving the transfer of DOGE worth $100,000 or more. According to on-chain data analytics firm IntoTheBlock, the number of DOGE transactions worth between $100,000 and $1 million has increased by more than 20% in the past seven days.
Similarly, the data shows that the number of DOGE transactions above $1 million has increased by more than 200% in the last 30 days.
In an April 1st post at X Market Intelligence, Sentiment shared the following chart;
“Top #memecoin by market cap (#8 market cap #crypto asset overall) is being powered by major dormant whales bringing $DOGE back into circulation.”
This surge in sleeping whale activity indicates that long-term holders are now profitable in the DOGE price after the March rally and are now cashing in, confirming the ongoing correction.
Bear difference
Dogecoin's fall today is preceded by a growing gap between its price and relative strength index (RSI).
Specifically, the price of DOGE increased between March 28 and March 31, creating significant lows. However, at the same time, the daily RSI has declined, creating lower lows.
According to technical analysis, the gap between inflation and falling RSI indicates increasing weakness, prompting traders to take profits on domestic inflation.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
