Could DOGE See A Rally Amidst The Quiet?

Thursday proved to be a quiet day for the meme coin sector, with DOGE recording gains of 2%. The on-chain and derivatives data of the leading meme token could give hints about its future price movements.

The past few days have seen relative calm persist in the meme coin sector after there was a decline in the price of Bitcoin.

There have been weekly losses in the double digits for many meme tokens. Dogecoin also recorded losses of 13%.

Funding Rate

Data from Coinglass showed that in the early hours of Thursday, the funding rate of Dogecoin had reached -0.0053%.

This is the lowest it has been since the beginning of 2024. A negative funding rate means that long traders need to pay short traders, while the opposite applies in the case of a positive rate.

Initially, the DOGE funding rate had become negative on June 18th, after there had been a price decline.

This resulted in long liquidations worth $60 million from DOGE traders. The rate had gone down further before it went positive.

Despite that, the decline points towards strong bearish sentiment amongst DOGE traders. In addition, there was also a decline in DOGE’s open interest (OI).

On Thursday, it dropped to $613 million after it had stood at $1 billion on June 6th. The decline in open interest shows that traders are taking a more cautious approach, which could reduce volatility.

On-chain Data

Along with the bearish sentiment, a whale transfer to the Robinhood Exchange had also been reported by Whale Alert.

The transaction saw a movement of 86,388,901 DOGE tokens valued at $10.6 million. This increased exchange inflow could see the price of the meme coin decline.

The whale transfer might be seen as traders looking to offload their holdings. But, data from IntoTheBlock also highlights some positive sentiment.

It shows that DOGE accumulation by investors is on the rise, as outflows have surpassed inflows. Furthermore, there has also been a decline in the ratio of large holders’ netflow to exchange netflow.

This indicates that retail traders have taken control.

The Possibilities

A higher ratio means that the activity of large holders is higher than retail traders, while a lower ratio indicates the opposite.

An earlier report had also suggested that there was a decline in DOGE large holders’ holdings. In this scenario, the largest meme token in the market could bounce back.

Previously, there had been a rally in DOGE’s price after the funding rate had declined temporarily. For now, the crucial support level is at $0.109 if the price drops.

This is because investors have purchased a total of 43 billion DOGE tokens at this price.