Dogecoin (DOGE) has experienced a significant surge in price, rising by 15% in the past 24 hours to reach $0.1543. This increase reflects the broader recovery across the cryptocurrency market. The rise in DOGE’s price can be attributed to a combination of fundamental and on-chain factors, including the growth of futures open interest and increased whale activity. Let’s take a closer look at the driving forces behind DOGE’s price movement today.
The rally in DOGE’s price began after the announcement that Coinbase, a well-known US-based cryptocurrency exchange, plans to introduce futures trading for DOGE. This move will also include the addition of Litecoin (LTC) and Bitcoin Cash (BCH) to Coinbase’s futures trading platform. Coinbase Derivatives submitted a proposal for a monthly cash-settled futures contract for Dogecoin to the Commodity Futures Trading Commission (CFTC) on March 7. The proposal outlined the contract’s size, structure, and settlement methods. Notably, the letter stated that Coinbase could list the DOGE futures contract under CFTC Regulation 40.2(a) without requiring official approval from the CFTC through a process known as “self-certification.” This means that as long as Coinbase Derivatives adheres to the CFTC’s regulatory guidelines, it can proceed with listing the DOGE futures contract.
Coinbase confirmed this development in a post on March 21, urging its users to stay informed about when these contracts will become available for trading on partner platforms. However, this raises interesting regulatory questions since the US Securities and Exchange Commission (SEC) considers all cryptocurrencies derived from Bitcoin as commodities, according to Bloomberg analyst James Seyffart.
In addition to the Coinbase news, DOGE’s price surge is also supported by a significant increase in futures open interest. Data from Coinglass shows that DOGE’s open interest has risen by 27.5% in the past 24 hours, surpassing the $1 billion mark and reaching $1.17 billion at the time of writing. Open interest refers to the number of open positions in options contracts and provides insights into an asset’s liquidity, demand, and price movements. The surge in DOGE’s open interest indicates that professional traders are showing an increased interest in the memecoin, which is a positive factor for its price.
Furthermore, whale activity in the DOGE network is also contributing to the coin’s rally. After the recent market correction that led to significant liquidations, DOGE dropped to as low as $0.125 and is currently down 10% on a weekly basis. However, a surge in whale transaction volume indicates a bullish signal for Dogecoin. Whale transactions involve the transfer of $100,000 or more worth of DOGE. According to on-chain data analytics firm IntoTheBlock, the number of DOGE transactions within the range of $100,000 to $1 million has increased by approximately 92% in the past 24 hours. Additionally, the data also reveals that the number of DOGE transactions larger than $1 million has surged by over 600% in the last 30 days.
IntoTheBlock stated in a post on March 21 that this increase in whale activity demonstrates the confidence that large investors have in the DOGE network. This trend appears to align with the price movements of the leading memecoin by market capitalization.
It’s important to note that this article does not provide investment advice or recommendations. Investing and trading in cryptocurrencies carry risks, and readers should conduct their own research before making any decisions.