June 14, 2024
$600M Locked in Dogecoin Futures as DOGE Hits Peak Since April
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$600M Locked in Dogecoin Futures as DOGE Hits Peak Since April

Bitcoin’s recent rapid surge has reignited risk-taking in the crypto market, prompting investors to funnel funds into less serious cryptocurrencies like Dogecoin (DOGE), originally conceived as a joke a decade ago.

DOGE, recognized as the world’s premier meme cryptocurrency, has witnessed a more than 10% increase in the past 24 hours, trading above $0.10 for the first time since April, per TradingView data. Over seven days, its value has surged by 27%, seemingly mirroring Bitcoin’s climb from $38,000 to $44,000.

The notional open interest tied to DOGE has spiked by 58% to $625 million in a week, reaching its highest point since November 2, 2022, according to sources.

Funding rates on various exchanges have spiked to an annualized 50% or higher, signaling a substantial premium in perpetual futures relative to spot prices, as per Velo Data. Positive rates signify investor preference for long, or bullish, positions, reflecting collective optimism about potential price increases.

Joke cryptocurrencies, characterized as high-beta assets, have a track record of aligning with Bitcoin’s movements, albeit with more pronounced fluctuations. In essence, they function as leveraged plays on the leading cryptocurrency.

Consequently, investors are advised to remain vigilant for potential excessively bullish movements in DOGE relative to Bitcoin, as this may serve as an indicator of speculative exuberance typically observed toward the end of a marketwide bullish trend. Despite DOGE’s notable surge, the DOGE/BTC ratio remains at depths associated with bear markets.

It’s important to note that a swift rise in the ratio has previously foreshadowed Bitcoin’s peak above $60,000 in April 2021 and the market-wide panic induced by FTX in November 2022.

Image by wirestock on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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