Dogecoin (DOGE) is down 5% today, hitting an intraday low of $0.16192 on May 28. This decline outpaces the broader crypto market, which fell around 1.47% over the same period. The dip in DOGE follows Bitcoin’s (BTC) 3.2% drop in the past 24 hours.
Dogecoin open interest decline
DOGE has recently seen significant gains, rising over 7.5% in the past 30 days. However, the price started to turn down on May 22 and May 26, now trading 2.5% below its value from a week ago. This decline coincides with a decrease in futures open interest (OI), which has dropped 37% from $1.67 billion in mid-April to $1.04 billion, according to Coinglass.
The funding rate for Dogecoin perpetual futures contracts also fell from 0.0243% on May 23 to 0.0118% on May 28. Reduced funding rates and OI indicate bearish sentiment among traders, potentially increasing selling pressure on DOGE.
Whale activity signals bearish trend
The recent marketwide correction, which saw millions of dollars liquidated, has also impacted DOGE, bringing its price as low as $0.1512. Whale activity, marked by large transactions involving $100,000 or more worth of DOGE, has increased. According to IntoTheBlock, transactions worth between $100,000 and $1 million have risen by over 28% in the past week, while transactions over $1 million have surged by more than 55% in the last 30 days. This uptick suggests institutional investors are cashing in on profits, reinforcing the ongoing correction.
Bearish divergence and resistance levels
DOGE's recent price drop follows a period of bearish divergence between its price and the relative strength index (RSI) on the weekly timeframe. Despite higher highs in DOGE's price from April 15 to May 28, the daily RSI recorded lower highs, signaling weakness in the uptrend and prompting traders to secure profits.
IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model shows immediate resistance for DOGE at the $0.165 supply zone, within the $0.163 to $0.168 range. Around 97,980 addresses in this range bought approximately 7.03 billion DOGE. Increased selling from this level adds to the overhead pressure, potentially pushing the price lower. The 50-day simple moving average at $0.10 provides the next significant support level.
