In the past week, Dogecoin (DOGE), the top memecoin based on market value, has surged by a whopping 95%.
Dogecoin (DOGE), the top memecoin by market value, surged 95% in the past week. Yet, this rise also saw Dogecoin futures hit a record $1.4 billion in open interest, sparking worries about trader optimism.
Dogecoin’s Role in Altcoin Bull Runs
Some analysts view Dogecoin as a pivotal player in altcoin bull runs, considering its historical performance and status as a top-10 cryptocurrency by market capitalization. Technical analysts also note similarities between current price movements and past periods of explosive growth for DOGE.
However, the record-breaking open interest in Dogecoin futures raises concerns about excessive leverage as traders speculate on potential drastic price movements. Similar situations in the past have been followed by high volatility.
Analyzing the perpetual funding rate, a crucial indicator of leverage demand, reveals that DOGE futures are currently experiencing their highest funding rate in over 18 months. While this suggests bullish sentiment, it’s important to recognize that this metric alone doesn’t necessarily indicate an unhealthy market. Moreover, other major cryptocurrencies like Bitcoin and Solana are also witnessing elevated funding rates.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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