Bitcoin’s price has managed to maintain stability above $67K since May 23rd, but traders are now turning their attention towards memecoins, such as Dogecoin (DOGE). This shift in focus is due to the anticipation of a possible supply overhang from the Mt Gox exchange.
Although Dogecoin has seen some gains in related tokens, its immediate outlook remains uncertain. QCP Capital, a crypto-trading firm based in Singapore, has observed a growing interest among traders in high-beta meme tokens like Shiba Inu (SHIB), Dogecoin (DOGE), and Pepe (PEPE). These tokens have experienced significant double-digit gains, ranging from 10% to 20%, and have ranked high in terms of Open Interest (OI).
According to a recent analysis by Coinalyze, PEPE and FLOKI have seen significant increases in OI over the past 24 hours. However, Dogecoin’s OI has continued to decline, decreasing by about 5% at the time of writing. This decline suggests a bearish sentiment among traders and may delay a strong short-term recovery for DOGE.
Open Interest rates are crucial indicators of market sentiment as they monitor the number of open futures contracts. A rising OI usually indicates bullish expectations, whereas a falling OI signifies bearish sentiment. Since May 27th, Dogecoin’s OI has been trending downwards, dropping below $900 million. This decline highlights a lack of confidence in DOGE’s price potential among market participants.
Additionally, the Cumulative Volume Delta (CVD) for DOGE has been on a downward trend since May 27th, further indicating that sellers currently dominate the market. These indicators suggest that Dogecoin is facing significant selling pressure.
Currently, Dogecoin is trading at $0.16 with a slight 24-hour increase of 0.12%. This marks an impressive 185x increase from its all-time low of $0.0000869. DOGE recently experienced a slight correction, trading at 0.00000235 after falling from 0.0000255. The 200-day Exponential Moving Average (EMA) and an ascending trendline provide key support for this pair.
On the resistance front, Dogecoin’s upward movement is limited by the confluence of the 20-day EMA and the 50-day EMA. The Relative Strength Index (RSI) is currently below the midline in the neutral zone, indicating a bearish divergence.
Bitcoin, on the other hand, has struggled to establish a clear bullish trend. It briefly surged to $72,000 last week due to excitement over the approval of Ethereum ETFs but then experienced a correction, settling at $68,723, reflecting a 0.8% increase over the past 24 hours. The market’s volatility and a lack of investor confidence have contributed to this correction.
The crypto market is expected to face increased volatility as the US releases its inflation data on personal consumption expenditure (PCE). This data is crucial as it will provide insights into the Federal Reserve’s future moves on interest rates. Economists predict the first interest rate cut to occur in September, although some hope for an earlier cut in June. The Fed aims to bring US inflation down to the target rate of 2%, a goal that remains challenging.
Bitcoin’s ability to break out of its current stagnation and surpass $70,000 depends on these economic indicators. A successful breakout could trigger a fear of missing out (FOMO) among investors, potentially driving Bitcoin’s price towards $80,000.