Open Interests for Dogecoin and Shiba Inu See Massive Crash: Heres How This Could Affect Price
Open interest in Dogecoin and Shiba Inu futures has plunged significantly amid a broader trend across the meme coin sector. According to a report from blockchain analytics firm Glassnode, futures OI for these assets has seen a sharp downturn. This decline comes amid ongoing price struggles in the market, with meme coins facing declines.Dogecoin Open Interest Takes a Major HitDogecoin, the largest meme coin by market cap, experienced a 58.45% drop in its futures open interest. The metric fell from $3.58 billion on December 9, 2024, to just $1.49 billion. Notably, this contraction in OI indicates that traders are either exiting leveraged positions or becoming less confident in speculative trading.https://twitter.com/glassnode/status/1892167279460114624For context, a reduction in open interest like this often suggests lower volatility in the short term, but it can also imply a potential market reset. When speculative interest declines, the likelihood of large, unexpected price swings drops. Shiba Inu and Other Meme coins Follow SuitAccording to Glassnode, Shiba Inu also saw a substantial decline in open interest, dropping 74.41% from $323 million to $83 million. Meanwhile, PEPE, BONK, and WIF recorded 71.93%, 75.10%, and 69.83% drops, respectively. FLOKI also saw a significant contraction of over 69.18%.Notably, the widespread nature of this crash indicates that traders are now shifting away from speculative meme coin trades, possibly in response to broader market conditions and recent issues regarding pump-and-dump meme schemes like LIBRA and ELIZA.Price ImplicationsTypically, a sharp reduction in futures OI can indicate either a market bottom or a sign of waning investor confidence. As leverage drops, price action could become more stable in the short term. However, it also means that less speculative capital is flowing into these meme coins, which could slow down any significant recovery rallies.Particularly, in the case of Dogecoin and Shiba Inu, the current OI drop may lead to reduced price volatility. If traders regain confidence and start building positions again, it could trigger renewed upward momentum. Dogecoin Price AnalysisDespite the downturn in open interest, some analysts remain optimistic about Dogecoin's future price movements. Crypto market analyst Crypto Rachel suggests that Dogecoin is currently at an oversold level, reminiscent of past market bottoms. https://twitter.com/Crypt0Rachel/status/1892128913461215536According to her, meme coin sentiment has reached peak fear, which historically precedes a strong recovery. She believes that Dogecoin could see a sharp price rebound, potentially reaching new highs for the year. Another analyst, Captain Parabolic, argued that Dogecoin could see a significant price surge over the next couple of years, with a bold prediction that the asset could reach $6 by 2026.
Text source: The Crypto Basic
