The price of Dogecoin declines amidst a broader correction in the cryptocurrency market, as traders opt to secure their profits.
Dogecoin (DOGE) has experienced a downturn today, with its price declining by 5% to $0.17, hitting an intraday low of $0.16192 on May 28. This decrease surpasses the broader crypto market’s decline of approximately 1.47% during the same period. The dip in DOGE follows Bitcoin’s (BTC) 3.2% drop over the past 24 hours, with Bitcoin’s price currently at $68,381.
Dogecoin open interest decline
Over the last month, DOGE has experienced notable growth, surging by more than 7.5%. However, its value began to decline on May 22 and May 26, currently resting 2.5% lower than it was a week ago. This downtrend aligns with a decrease in futures open interest (OI), which has fallen by 37% from $1.67 billion in mid-April to $1.04 billion, as reported by Coinglass.
The funding rate for Dogecoin perpetual futures contracts has decreased from 0.0243% on May 23 to 0.0118% on May 28. This decline, coupled with a decrease in Open Interest (OI), suggests a bearish sentiment among traders, which could intensify selling pressure on DOGE.
Whale activity signals bearish trend
The recent widespread market downturn, resulting in significant liquidations, has also affected DOGE, pushing its price down to $0.1512. Notably, there has been a rise in whale activity, characterized by substantial transactions involving $100,000 or more worth of DOGE. According to IntoTheBlock, transactions ranging from $100,000 to $1 million have increased by over 28% in the past week, while transactions exceeding $1 million have surged by more than 55% in the last 30 days. This increase suggests that institutional investors are capitalizing on profits, contributing to the ongoing market correction.
Bearish divergence and resistance levels
The recent decline in DOGE’s price coincided with a period of bearish divergence between its price and the relative strength index (RSI) observed on the weekly timeframe. Although DOGE’s price made higher highs between April 15 and May 28, the daily RSI showed lower highs, indicating a weakening uptrend and leading traders to take measures to lock in profits.
According to IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, Dogecoin faces immediate resistance at the $0.165 supply zone, falling within the range of $0.163 to $0.168. Approximately 97,980 addresses purchased around 7.03 billion DOGE within this range. If selling activity intensifies at this level, it could contribute to downward pressure on the price. The next notable support level is the 50-day simple moving average at $0.10.
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