Crypto Traders Abandon Bitcoin (BTC) for Memecoins: Is DOGE the Next Big Winner?

  • Dogecoin (DOGE) prices have recently eased near the $0.15 short-term support level amidst a reported shift in traders’ focus towards legacy memecoins.
  • Despite the stagnation below $0.17, there is speculation on whether DOGE interest will revive following this shift in trader sentiment.
  • According to QCP Capital, traders are now eyeing higher beta memecoins like Shiba Inu (SHIBA) and Pepe (PEPE), which have shown significant gains.

Dogecoin (DOGE) prices hover near $0.15 as traders pivot to legacy memecoins. Will DOGE interest rebound?

Traders Shift Focus to Legacy Memecoins

Since May 23rd, Bitcoin (BTC) has been consolidating above $67K, leading some traders to pivot their focus towards memecoins, particularly legacy ones like Dogecoin (DOGE). This shift comes amidst an impending supply overhang from the Mt Gox exchange, which has caused traders to seek alternative high-beta assets.

QCP Capital’s Insights on Market Trends

Singapore-based crypto-trading firm QCP Capital has noted a significant shift in trader interest towards legacy memecoins. According to their analysis, higher beta meme tokens such as Shiba Inu (SHIBA), Dogecoin (DOGE), and Pepe (PEPE) have seen double-digit gains and are currently polling in the top 10 for Open Interest (OI).

“Traders are shifting focus to higher beta meme tokens like Shiba Inu (SHIBA), Dogecoin (DOGE), and Pepe (PEPE), which have seen double-digit gains (10-20%) and are polling in the top 10 for Open Interest.”

Analyzing Dogecoin’s Market Position

A spot check on Coinalyze revealed that while tokens like Pepe (PEPE) and Floki (FLOKI) have recorded an upswing in open interest rates, Dogecoin’s OI remains negative, down about 5% at the time of writing. This negative trend could delay a strong short-term recovery for DOGE.

Understanding Open Interest (OI) Rates

Open Interest (OI) rates track the number of open futures contracts and the money flowing into or out of them. A rising OI suggests bullish sentiment, whereas a declining OI indicates bearish sentiment. DOGE’s OI has been trending lower since May 27th, sliding below $900 million, which denotes an underlying bearish sentiment on DOGE’s price prospects.

The downsloping spot CVD (Cumulative Volume Delta) further demonstrates sellers’ market leverage since May 27th. However, DOGE is approaching a key short-term support level near $0.15. A rebound in short-term demand could push DOGE towards the short-term supply levels at $0.17 or $0.20.

Technical Indicators and Future Outlook

Technical indicators such as the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) are currently showing below-average readings, suggesting a possible retest of the demand area marked by cyan. If this occurs, a surge in OI could confirm a rebound and reversal scenario for DOGE.

However, a breach below the $0.15 support level could drag DOGE down to multi-month support at $0.13, highlighting the importance of monitoring these technical levels closely.

Conclusion

In summary, Dogecoin (DOGE) is at a critical juncture as traders shift their focus towards legacy memecoins. While current market indicators suggest a bearish sentiment, the approaching key support level at $0.15 could offer a potential rebound opportunity. Investors should keep an eye on OI trends and technical indicators to gauge future price movements and market sentiment.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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