In contrast to the overall cryptocurrency market, which gained 1.71% on the same day, Dogecoin’s price increased 7.5% to $0.186 on April 6.
Dogecoin’s recent price surge is consistent with optimistic trends observed in the top-ranked memecoin, as illustrated below, suggesting that traders are becoming more willing to take on risk.
Memecoins are regarded by the market as some of the most speculative investments in the cryptocurrency space because of their lack of intrinsic value or usefulness. Compared to conventional safe-haven investments, this viewpoint places them at the highest danger. Concurrently, the dollar—which has historically been viewed as a stronghold of stability—is losing value in relation to a group of top international currencies. The four-hour chart of the U.S. Dollar Index (DXY) below clearly illustrates this trend.
A concurrently developing negative connection between the DOGE and the DXY is shown in the figure, highlighting the fact that the dollar’s depreciation is temporarily enhancing the allure of riskier memecoins, particularly on April 6.
An anonymous wallet address ending in…wwKF has acquired a significant amount of DOGE—199.27 million—through two transactions in the previous day, according to recent data made public by Whale Alert.The wallet first bought 100 million DOGE, or $17.77 million, from Robinhood. It then bought 99.27 million coins, or $17.68 million, from the same source in a second transaction.
These noteworthy actions attracted a lot of attention right away, which helped DOGE’s price rise swiftly.Nevertheless, there has been a noticeable drop in the number of entities that are considered Dogecoin whales, particularly those that possess more than 100,000 and 1 million DOGE.
It suggests that the market may have overemphasized the significance of the accumulation activities at Robinhood.
Dogecoin’s price increase has been accompanied by a precipitous drop in the open interest (OI) and funding rate of its perpetual contracts.Notably, from a peak of $2.21 billion on March 29 to $1.38 billion on April 6, the market’s outstanding contract holdings have decreased.It suggests that traders are liquidating their holdings for a variety of reasons, including taking profits, limiting losses, or lowering exposure.
As of April 6, its funding rate is 0.0172%, a considerable decrease from its previous peak of 0.106% on the same day last year.This is frequently the case when the market anticipates a price stabilization or decline, or when fewer traders are prepared to initiate or hold long positions.
When selling pressure lessens due to traders closing their short positions, the price might climb even with lower trading volume and interest. This is usually shown by declining OI and funding rates combined with rising price.Technically speaking, the 200–4H exponential moving average (200–4H EMA; the blue wave) and an ascending trendline, both located at roughly $0.167, are the sources of DOGE’s current price increase.
The bounce off the support confluence is comparable to what DOGE saw on March 19, which came before an 85% increase to $0.22.