- Dogecoin’s futures open interest reached its highest since May 2021, hitting $1.19 billion, signaling a surge in the derivatives market and a broader rally in meme coins.
- Large investors accumulating Dogecoin and its 77% price surge align with historical trends before Bitcoin halvings.
Dogecoin (DOGE) has seen a notable turn in events, with its futures open interest surging to levels not seen since May 2021. According to Coinglass, a wider surge in the meme coin market has coincided with the meme coin’s futures open interest reaching its greatest point. This surge is marked by a substantial increase in market capitalization for meme-based assets such as Shiba Inu, Pepe, dogwifhat, Floki, and Bonk over the past week.
As of the latest update, Dogecoin’s futures open interest stands at a staggering $1.19 billion, signifying a renewed interest in its derivatives market. The increase suggests the influx of new capital, with traders either opening fresh positions or maintaining existing ones. Notably, DOGE’s price has climbed by 75% in the same period, reaching $0.14, its highest since April 2022.
Coinglass data reveals that since the commencement of the bull cycle in October, DOGE’s funding rates across exchanges have consistently remained positive. Positive funding rates indicate that holders are favoring a price rally, marking a bullish signal for the meme coin.
Social Activity and Milestones
The recent spike in meme coin demand has led to a surge in Dogecoin’s social activity. DOGE’s Social Dominance is reported at 3.25% as of March 2nd, reaching its highest level since June 2023. Additionally, its social volume closed the same day at 880, suggesting a genuine interest rather than mere market “noise.” A boost in social activity often aligns with positive price movement, indicating a bullish market sentiment.
Another milestone for DOGE is the Market Value to Realized Value (MVRV) ratio, reaching 66.28% at press time, the highest since October 2021. This metric serves as an indicator of whether an asset is overvalued or undervalued. The 66.28% MVRV ratio implies that DOGE holders could secure an average of 66% returns on their investments if they sell at the present market price.
Whale Accumulation and Price Surge
Amid DOGE’s impressive rally, large investors, often referred to as “whales,” have been accumulating the cryptocurrency. The number of addresses holding over 100,000 DOGE has increased since January, suggesting a strategic accumulation rather than active trading. Interestingly, there’s been a slight dip in addresses holding over 1 million DOGE, further indicating a shift in trading dynamics.
Anticipation Surrounding Bitcoin Halving
Analysts attribute Dogecoin’s recent surge to historical trends before previous Bitcoin halvings. With the upcoming Bitcoin halving scheduled for April 19, 2024, interest in DOGE has intensified as traders seek alternative investments for potentially higher short-term gains. This aligns with previous instances where DOGE experienced notable increases of 200% and 50% before Bitcoin halvings.
Similar trends unfold in other meme coins, displaying significant gains anticipating the Bitcoin halving. This suggests a broader memecoin rally driven by expectations of increased market activity surrounding the impending event.
