Memecoins
Traders prefer Dogecoin while Bitcoin stagnates
- Bitcoin price has stabilized above $67,000, but traders are shifting focus to memecoins.
- Dogecoin Open Interest is declining, indicating bearish sentiment.
Since May 23, Bitcoin’s price has remained stable above $67,000, but traders are increasingly turning their attention to memecoins like Dogecoin (DOGE). This shift occurs in anticipation of potential oversupply by the Mt Gox Exchange. Despite some gains in related tokens, Dogecoin’s immediate prospects remain uncertain.
Second QCP Capital, a Singapore-based cryptocurrency trading firm, traders have shown increasing interest in high-beta meme tokens such as Shiba Inu (SHIB), Dogecoin (DOGE), and Pepe (PEPE). These tokens have recorded notable double-digit gains, ranging from 10% to 20%, ranking among the top in terms of Open Interest (OI).
A recent analysis of Coinalize indicated that PEPE and FLOKI experienced significant increases in OI over the past 24 hours. However, Dogecoin OI has continued to decline, falling around 5% as of this writing. This decrease suggests bearish sentiment among traders and could delay a strong near-term recovery for DOGE.
Open interest trends and market sentiment
Open interest (OI) rates, which track the number of futures contracts open, are key market sentiment indicators. A rising OI typically signals bullish expectations, while a falling OI indicates bearish sentiment. Since May 27, Dogecoin OI has been trending downward, falling below $900 million. This decline highlights a lack of confidence in DOGE’s price potential among market participants.
Furthermore, the Cumulative Volume Delta (CVD) for DOGE has been trending down since May 27, further indicating that sellers currently dominate the market. These indicators suggest that Dogecoin is facing significant selling pressure.
Dogecoin is currently trading at $0.16 with a slight 24-hour increase of 0.12%. According to data from CoinGecko, this marks an impressive 185-fold increase from the all-time low of $0.0000869. DOGE recently I saw a slight correction, trading at 0.00000235 after falling from 0.0000255. Key support for this pair is provided by the 200 day exponential moving average (EMA) and an ascending trend line.
On the resistance front, Dogecoin’s upward movement is limited by the confluence of the 20-day EMA and the 50-day EMA. The RSI (Relative Strength Index) is currently below the midline in the neutral zone, suggesting a bearish divergence.
Bitcoin Struggles Amid Volatility
Bitcoin has been having difficulty establishing a clear uptrend. The cryptocurrency rose to $72,000 last week, fueled by excitement over the approval of Ethereum ETFs. However, this was followed by a correction, with The price of Bitcoin stands at $68,723, reflecting an increase of 0.8% in the last 24 hours. Market volatility and lack of investor confidence contributed to this correction.
The cryptocurrency market is expected to experience increased volatility as the United States releases personal consumption expenditure (PCE) inflation data. This data is crucial as it will provide information on the Federal Reserve’s future moves on interest rates. Economists expect the first interest rate cut to come in September, although some hope for an earlier cut in June. The Fed aims to bring U.S. inflation back to its target rate of 2%, a goal that remains challenging.
Bitcoin’s ability to break out of its current doldrums and surpass $70,000 depends on these economic indicators. A successful breakout could trigger fear of missing out (FOMO) among investors, potentially pushing Bitcoin’s price towards $80,000.