Dogecoin is facing significant pressure as open interest in the cryptocurrency has dropped sharply over the past three months.
Crypto analyst Ali Martinez pointed out that Dogecoin’s open interest has declined by 67%, falling from an all-time high of $4.07 billion to just $1.33 billion. This steep decline signals reduced investor interest and growing uncertainty in the market.
Dogecoin’s Price Actions
The broader crypto market remains highly volatile, adding to Dogecoin’s struggles. Bitcoin, the market leader, slipped below $85,000, hitting its lowest point since mid-November. Other cryptocurrencies followed suit, with Dogecoin also taking a hit.Â
At the time of writing, Dogecoin is trading at $0.2086, down by 1% for the day. Its global market cap stands at $30.92 billion, while the 24-hour trading volume has dropped by 12.04%.
Altcoins Face Pressure as Investors Shift Focus
Altcoins, including Dogecoin, have been under pressure as investors explore other opportunities. The sector is still reeling from the Bybit exchange attack last week, which shook confidence in the market.
Many investors are now being cautious, avoiding high-risk assets and waiting for more stability before making new moves.
This shift in sentiment has left altcoins struggling, with Dogecoin among those feeling the impact. The decrease in open interest suggests that traders are closing positions and stepping away from speculative bets. Without renewed demand, Dogecoin could see further price declines.
Key Support Levels in Focus
Ali Martinez previously predicted that Dogecoin could drop to $0.197 after breaking out of a symmetrical triangle pattern.
He highlighted the importance of the $0.19 support level, warning that if Dogecoin falls below $0.197, the chances of a much steeper decline increase. In his view, breaking this level could trigger a deeper correction, potentially sending Dogecoin toward $0.060.
For now, Dogecoin’s price remains above critical support, but the continued drop in open interest and whale activity raises concerns about the coin’s short-term future.
Whale Activity Declines Sharply
One of the major factors affecting Dogecoin is the significant drop in whale activity. According to Martinez, large transactions on the Dogecoin network have fallen by nearly 88% since mid-November.
This indicates that big investors are not as active in the market as they were before, which could lead to lower liquidity and higher volatility.
Whales often play a crucial role in setting price trends. When they reduce their activity, it can signal a lack of confidence in future price movements. This could be another reason why Dogecoin has been struggling to gain momentum.
Dogecoin is facing a tough period as market volatility continues to weigh on its price. The sharp decline in open interest, reduced whale activity, and overall weakness in the crypto market have created a challenging environment for the meme coin.
Also Read: Whales Buy 460 Million Dogecoin Amid Price Dip As $DOGE Price Climbs 6%, Is More Price Surge Coming?