Is the surge not over yet? Dogecoin explosion? DOGE futures open interest skyrocketed by 64%, is the next wave of market on the way?
Despite the recent pullback in Dogecoin (DOGE) prices, on-chain data shows that market speculation sentiment has not weakened. According to the latest report released by on-chain analysis platform Glassnode, the open interest of Dogecoin futures increased by nearly 64% in the past week, reflecting the continued enthusiasm of market participants in trading derivatives of this asset.
'Open interest' refers to the total amount of Dogecoin futures positions that remain unsettled across all centralized derivatives exchanges. An increase in this metric indicates that more investors are opening new long and short positions in the market, which usually leads to a higher overall leverage ratio, thereby triggering greater price volatility.
Conversely, when open interest declines, it means that investors are actively closing positions or facing forced liquidations, usually accompanied by reduced market volatility and a tendency towards stability.
As shown in the figure, Dogecoin futures open interest has recently surged significantly, indicating that investors are making substantial bets on this memecoin. In just the past week, this metric jumped from $989 million to $1.62 billion, an increase of nearly 64%.
The recent surge in open interest initially coincided with a strong rebound of DOGE. Investors tend to flood into the market during a bullish phase, increasing leverage bets to seek higher returns, which explains the initial spike in data.
However, it is worth noting that despite the recent slowdown in Dogecoin price growth and even some degree of pullback, open interest continues to rise. As Glassnode pointed out: 'This decoupling phenomenon indicates that even as price momentum declines, speculative positions in the market remain active, and this divergence is worthy of close attention.'
