Dogecoin registers biggest single-day gain in four months, futures open interest tops $500m
|Meme cryptocurrency dogecoin (DOGE) jumped 10% on Tuesday, registering its biggest single-day gain since April 3, according to Binance data tracked by charting platform TradingView.
The cryptocurrency has gained 25% in two weeks amid speculation that the cryptocurrency could be used as a payment mechanism on the rebranded Twitter platform.
"As crypto is entering the summer lull that we initially expected for August, DOGE might be the summer’s highflyer as other crypto themes are taking a backseat. Musk is on a marketing tour in re-inventing Twitter," Markus Thielen, head of research and strategy at Matrixport, said.
Traders seem to think the same, as evident from the pick-up in the perpetual futures market tied to DOGE.
The notional open interest, or the dollar value locked in the number of active perpetual futures contracts, has topped the $500 million mark for the first time since April 19, per data tracked by Coinglass. The tally has more than doubled in two weeks. In DOGE terms, open interest has surged to 6.2B, nearing the peak of 6.43B reached on April 8.
Open interest has surged indicating an influx of new money into the market. (Coinglass) (Coinglass)
A combination of an increase in open interest alongside a rise in price suggests an influx of new money into the market and is said to confirm an uptrend.
However, at press time, the open interest weighted-funding rates have dropped to zero, suggesting a balance between bullish long and bearish short positions.
Perhaps, DOGE may see a bull breather after the recent market-beating performance. Funding rates refer to the costs of holding long/short positions, with positive readings implying a dominance of longs.
Funding rate refers to cost of holding bullish long and bearish short positions in the perpetual futures market. Positive figure indicates longs are dominant and are paying shorts to keep their positions open. (Coinglass) (Coinglass)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.