Dogecoin (DOGE) is experiencing a decline in price today as the broader cryptocurrency market undergoes a significant correction. Over the past 24 hours, DOGE has dropped by more than 5.5%, reaching a low of $0.1712 on April 3. This underperformance compared to the overall crypto market, which only fell by around 0.17% during the same period, can be attributed to a correction in Bitcoin (BTC), which has seen a retreat of nearly 7.7% in the last two days.
One of the likely reasons behind Dogecoin’s recent pullback is the decrease in open interest (OI) for the cryptocurrency. Data from Coinglass shows that DOGE OI has fallen by 27.6% from $2.21 billion on March 28 to the current value of $1.60 billion. Additionally, the funding rate for Dogecoin perpetual futures contracts has also decreased from 0.107% to 0.021% over the same time period. These reductions in funding rates and OI indicate a bearish sentiment among traders, suggesting that they expect prices to decline further.
Furthermore, the recent correction in DOGE is supported by whale activity. Whale transactions, which involve the transfer of $100,000 or more worth of DOGE, have increased by more than 20% for transactions worth between $100,000 and $1 million over the past seven days, according to data from IntoTheBlock. Additionally, the number of DOGE transactions larger than $1 million has surged by more than 200% in the last 30 days. This increase in whale activity indicates that long-term holders are now in profit after DOGE’s rally in March and are selling their holdings, contributing to the ongoing correction.
In addition, there is a growing bearish divergence between DOGE’s price and the relative strength index (RSI). While DOGE’s price formed higher lows between March 28 and March 31, its daily RSI formed lower lows during the same period. This signifies weakness in the uptrend and prompts traders to secure profits at local price highs.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions as they involve risk.