Bitrabo Editorial
Recently, Dogecoin, along with the broader crypto market, has experienced a slowdown that has had a significant effect on its price. One interesting development during this period is the notable decrease in Dogecoin’s open interest-weighted funding rate.
Dogecoin’s Open Interest-Weighted Funding Rate Plummets by 50%
As the price of Dogecoin surged in the past few days, so did its open interest-weighted funding rate. This rate tends to mirror market sentiment – rising during bullish phases when long traders pay short traders to maintain positions and dropping during bearish phases when the opposite occurs.
These funding rates assist exchanges in ensuring that contract prices align with the underlying asset prices regardless of market conditions. Exchanges charge these fees periodically, but the specific intervals vary among different platforms.
The decline in Dogecoin’s open interest-weighted funding rate indicates a bearish sentiment among investors. When Dogecoin reached $0.17, the funding rate stood at 0.0243%. However, with the price retracing to around $0.16, the funding rate has plummeted to 0.0105% as reported by Coinglass data.
This sharp decline of over 50% from Thursday’s levels highlights how quickly sentiment can shift within the Dogecoin market. If Dogecoin’s price demonstrates a resurgence, the open interest and funding rate are likely to rise once again.
Open Interest Declines alongside Dogecoin Price
Concurrently with Dogecoin’s price decrease, the open interest associated with the cryptocurrency has also experienced a setback. After briefly reaching close to $1 billion on May 22, a subsequent 10% drop has pushed it back to around $900 million.
Within the past day, data from Coinglass reveals significant losses in Dogecoin’s open interest on major exchanges. The largest decline was observed on Kraken, with a 35.94% drop, followed by dYdX at 18.57% and Coinbase at 11.36%. Other exchanges saw decreases ranging from 1.25% to 7.4%, resulting in a total open interest decline of 5.31% to $907.8 million.
Presently, Dogecoin’s price hovers around $0.1587 with a 4.59% decline in the last 24 hours. Notably, Kabosu, the Shiba Inu dog associated with the iconic Dogecoin logo, recently passed away.