Friday, 19 April 2024

Crypto News

Dogecoin price limps below a key support after Dogeday turns into a sell-the-news event

Dogecoin price limps below a key support after Dogeday turns into a sell-the-news event

Dogecoin suffered a big blow on April 20, popularly known as “Dogeday” thanks to the failed test launch of SpaceX’s Starship rocket and downturn in the broader crypto market

The SpaceX rocket, which featured the Dogecoin mascot on its side, disintegrated four minutes after its launch. Still, the company’s employees including Elon Musk cheered the failure as they expressed optimism for another test in coming months.

The move comes within a fortnight of Musk’s recent stunt when he momentarily changed Twitter’s logo to the Dogecoin mascot.

The launch had built considerable excitement within the Dogecoin community. DogeDesigner, a graphic designer in the Dogecoin community, tweeted about the rocket launch with eagerness.

However, Dogeday appears to have turned into a sell-the-news event as the DOGE/USD pair lost 11.88% of the day’s high of $0.093 to $0.083.

DOGE open interest remains elevated

Despite the drop in prices, the open interest (OI) volume for Dogecoin futures contracts are above the January 2023 high at $470 million, according to Coinglass data. Open Interest volume is the number of open positions in the futures market.

Dogecoin’s OI volumes spiked to a yearly peak of $580 million on April 4 after Twitter changed its logo to a Shiba Inu image which is also used to represent Dogecoin.

The DOGE/USD pair exhibited significant volatility following the logo change, rising over 21% to a new yearly peak of $0.10 on April 4. However, the price and IO volumes declined significantly after the social media platform returned to its original blue bird logo. The logo change was active between April 4 to April 7.

A report from crypto analytics firm, Kaiko, noted,

“DOGE open interest has roughly doubled since Elon Musk took over Twitter last year, suggesting robust capital inflows.”

The OI volume for futures contracts dropped to $460 million following a wave of liquidations. However, the OI volumes picked up again to $533 million, leading up to the excitement around rocket launch.

1-year futures open interest volume for Dogecoin. Source: Coinglass

While the DOGE price dip from April 19 caused widespread liquidations of around $104 million, the OI volumes are above the January 2023 highs, suggesting that the token may experience more volatility.

The long-to-short ratio of the futures market shows a…

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