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DOGE price increase today is primarily due to buying signals on the Robinhood platform and a decreasing appetite for the dollar. Today, the price of Dogecoin rose by 7.5% to $0.186. This increase in Dogecoin‘s price represents a higher surge compared to other cryptocurrencies in the market. So, what could be the driving forces behind this increase?
Weak Dollar Increases Risk Appetite
Dogecoin‘s price increase today indicates a growing risk appetite among investors. The market views meme coins as one of the most speculative investments in the crypto sector due to their minimal underlying value or practical benefits. This perspective places them at the pinnacle of risk, creating a stark contrast with traditional safe-haven assets.
Simultaneously, the US dollar, traditionally seen as a fortress of stability, is losing value against leading foreign currencies, and this trend is vividly shown in the four-hour US Dollar Index (DXY) chart below.
The chart also reveals a negative correlation between DOGE and DXY, emphasizing that the weakening dollar has momentarily increased the appeal of riskier meme coins, especially on April 6th.
Are DOGE Whales Accumulating?
According to recent data released by Whale Alert, an unknown wallet address made a significant purchase of 199.27 million DOGE in two transactions over the last 24 hours. The first transaction involved buying 100 million DOGE worth $17.77 million from Robinhood. This was followed by a second purchase of 99.27 million coins, equivalent to $17.68 million, from the same platform.
These large moves have attracted widespread interest and contributed to a rapid increase in DOGE’s price. However, there has been a notable decline in the number of assets classified as Dogecoin whales, especially those holding more than 100,000 and 1 million DOGE.
Dogecoin’s Open Interest and Funding Rates
Dogecoin‘s price increase coincides with a sharp decline in open interest (OI) and funding rates. Notably, the number of outstanding contract positions in the market dropped from a peak of $2.21 billion on March 29th to $1.38 billion on April 6th. This suggests that investors are likely closing positions for various reasons such as taking profits, reducing losses, or lowering exposure.
Furthermore, the funding rate has also experienced a notable decrease. As of April 6th, the funding rate stood at 0.0172%, significantly lower than the recent high of 0.106% on April 1st. This typically indicates that investors are less willing to take or maintain long positions or that the market expects price stability or a potential decline.
Alongside the rising price, falling OI and funding rates typically indicate that selling pressure decreases as investors close short positions, allowing the price to rise even in a market with reduced trading volume.
