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Dogecoin (DOGE) Prices Fall as Traders Bet Against the Token, “Memecoin Summer on Hold,” Some Say
The crypto market’s biggest meme token is starting to attract short bets amid a general decline in the meme sector, which could spell concern for the meme sector.
Coinalize data shows that Dogecoin (DOGE) funding rates started to turn negative from Tuesday, reaching -0.0027% as of Thursday – reaching levels previously seen in October 2023. Funding fees are periodic payments made by traders based on the difference between prices in the futures and spot markets.
While these rates are not unusually high, they indicate a bearish mood in the market when they continually decline along with a drop in prices. DOGE lost 12% last week, erasing all gains since March.
DOGE open interest, or the number of unsettled futures contracts, decreased from nearly $800 million on Monday to $611 million on Thursday, also indicating a drop in demand for the tokens.
Rates briefly turned red during a few eight-hour trading sessions in March, but not for an extended period as seen this week so far.
Tokens across the meme coin sector recorded losses of up to 40% over a seven-day period as traders warned of a shift away from riskier tokens towards bitcoin and stablecoins.
“When the price of Bitcoin drops, memecoins tend to not only follow, but lose an even greater portion of their value,” shared Neil Roarty, an analyst at investment platform Stocklytics, in a Thursday email to CoinDesk . “Any plans for a memecoin summer may have to be postponed.”
As previously reported This week, DOGE futures traders recorded their worst day since May 2021, when the token saw $60 million in longs liquidated, exceptionally more than for bitcoin (BTC) futures.
These declines came as bitcoin (BTC) prices have suffered in recent weeks amid $2 billion in selling by large holders, net outflows from U.S.-listed exchange-traded funds (ETFs) and dollar strength.