- According to research, DOGE financing rates are beginning to turn negative as investors steer clear of riskier assets in the face of low volatility in the overall cryptocurrency market.
The largest meme token on the crypto market is beginning to draw short bets in the midst of a general downturn in the meme industry, which could be concerning.
Dogecoin (DOGE) financing rates have been declining since Tuesday, according to Coinalyze statistics. As of Thursday, they had dropped to -0.0027%, which was levels last seen in October 2023.
The difference between prices in the futures and spot markets is used by traders to determine their funding rates, which are paid on a regular basis.
Even though these rates are not very high, their persistent decline in tandem with price declines suggests a gloomy market environment. Over the past week, DOGE has lost 12%, wiping out all of its gains from March.
The quantity of outstanding futures contracts, or DOGE open interest, dropped from about $800 million on Monday to $611 million as of Thursday, suggesting a decline in interest in the tokens.
In March, there were a few eight-hour trading sessions when the rates momentarily turned negative, but not for as long as they have this week.
Over the course of seven days, tokens in the meme coin industry have lost up to 40% of their value, warning investors to switch from risky tokens to bitcoin and stablecoins.
According to Neil Roarty, an analyst at the investing platform Stocklytics, meme coins typically lose a larger percentage of their value when the price of Bitcoin declines. He shared this information with CoinDesk in an email on Thursday. Memecoin summer plans might have to be postponed.
As was previously mentioned this week, DOGE futures traders had their worst day since May 2021 as $60 million in long positions in the token were liquidated, a remarkably higher amount than for bitcoin (BTC) futures.
These declines coincided with a decline in the price of bitcoin (BTC) over the previous two weeks due to $2 billion in sales by major holders, net withdrawals from exchange-traded funds (ETFs) with U.S. listings, and strengthening dollar values.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
