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HomeNewsDogecoin Funding Rate Drops 50%: What It Means

Dogecoin Funding Rate Drops 50%: What It Means

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  • The over 50% decline in Dogecoin’s OI-weighted funding rate was a sign of bearish sentiment.
  • Prices and open interest for dogecoin have fluctuated significantly recently.

Dogecoin’s price has dropped significantly over the last day, much like the rest of the cryptocurrency market. But this slowdown goes beyond price; the meme coin’s open interest-weighted funding rate has likewise fallen precipitously.

Dogecoin Funding Rate Drops 50% OI-Weighted

The OI-weighted funding rate increased along with the Dogecoin price during the last few days. This is typical since market mood affects the funding rate.

As long traders have to pay short traders to maintain their positions open, the funding rate rises during extremely bullish crypto trading. In contrast, funding rates fall and short traders pay long traders to hold onto their positions when sentiment turns bearish.

Exchanges need funding rates in order to balance contract prices with the prices of underlying assets, independent of market environment. Exchanges bill these costs periodically, but the length of time between each charge varies.

Bearish Turn in Market Sentiment

The recent decline in the Dogecoin OI-weighted funding rate suggests that investor sentiment is bearish. On Thursday, when Dogecoin’s price hit $0.17, the funding rate adjusted for OI hit 0.0243%.

dogecoin
Source: Coinglass

But as the price has retreated to $0.16, Coinglass data shows that the OI-weighted funding rate is now at 0.0105%. This drop of more than 50% shows how fast, for a cryptocurrency like Dogecoin, opinion can shift. Should Dogecoin prices bounce back, the OI-weighted open interest is probably going to increase once more.

Open Interest Drops

Open interest has suffered along with the price drop for Dogecoin. A 10% drop on Wednesday, May 22, wrecked its comeback to almost $1 billion and sent it back to about $900 million.

The majority of this fall happened within the last 24 hours, as Coinglass data reveals significant losses on all of the big exchanges. Open interest fell the most on the Kraken cryptocurrency exchange, down 35.94%.

CoinMarketCap statistics shows that the price of DOGE is now about $0.1644, up 5.69% in the previous day. Dogecoin has also been trending upward over the last week, rising by 6.84%.

An Honorary Tributary to Kabosu

As for other news, ETHNews just reported that the famous Dogecoin meme dog Kabosu passed away at the age of 17. The Dogecoin community has come to associate Kabosu with the cryptocurrency.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Syofri
Syofri
Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628
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