Markets
Dogecoin (DOGE) Prices Fall as Traders Bet Against Tokens, “Memecoin Summer on Hold,” Some Say
The crypto market’s largest meme token is starting to attract short bets amid a general decline in the meme sector, which could worry the meme sector.
Coinanalyze data shows that Dogecoin (DOGE) Funding rates started to turn negative since Tuesday, reaching -0.0027% on Thursday – reaching levels previously seen in October 2023. Funding rates are periodic payments made by traders based on the difference between prices on futures and spot markets.
While these rates are not unusually high, they indicate a bearish mood in the market as they continually fall alongside falling prices. DOGE has lost 12% over the past week, erasing all gains since March.
DOGE open interest, or the number of unsettled futures contracts, fell from nearly $800 million on Monday to $611 million on Thursday, also indicating a decline in demand for the tokens.
Rates briefly turned red during a few eight-hour trading sessions in March, but not for a prolonged period as seen this week so far.
Let’s chips through the coin industry have recorded losses of up to 40% over a seven-day period, with traders warning against abandoning riskier tokens in favor of Bitcoin and stablecoins.
“When the price of Bitcoin falls, memecoins tend not only to follow, but to lose an even greater portion of their value,” explained Neil Roarty, an analyst at the investment platform Stocklytics, in an email to Thursday at CoinDesk. “Any summer memecoin plans may have to be put on hold.”
As reported earlier This week, DOGE futures traders recorded their worst day since May 2021, as the token saw $60 million in long positions liquidated, unusually more than for Bitcoin (BTC) futures.
These declines came as bitcoin (BTC) prices have suffered in recent weeks, amid $2 billion in sales by large holders, net outflows from U.S.-listed exchange-traded funds (ETFs) United and the strength of the dollar.