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Dogecoin Bullish Bets Reach Record $1B

source-logo  coindesk.com 29 February 2024 09:28, UTC

Traders are using prominent meme tokens, such as Dogecoin (DOGE) and bonk (BONK), as ecosystem bets for their respective blockchains, Ethereum and Solana.

DOGE futures set a record open interest at $1 billion - indicative of the strong interest in the tokens. Nearly 70% of these bets were on the long side.

Traders are continuing to use prominent meme tokens as ecosystem bets on their respective blockchains, boosting dogecoin (DOGE) futures to set a record level.

DOGE tokens were up as much as 40% before giving back some gains in the past 24 hours as bitcoin (BTC) rallied to over $63,000 from $59,000. DOGE led gains among major tokens and significantly beat the broader CoinDesk 20 (CD20) index, which is up nearly 7.8% in the same period.

Open interest, or the amount of unsettled bets on DOGE futures, increased over 54% since Wednesday, Coinglass data shows, setting a lifetime record of $1 billion in bets involving the tokens.

An increase in open interest means new or extra money entering the market. Data shows 70% of traders are long DOGE – expecting it to go higher.

As such, data from CryptoQuant tracking DOGE price action shows the token’s Relative Strength Index (RSI), a measure of the rate of change of prices, has reached the “overbought” level - one that indicates a “possible trend reversal” in the coming days.

Fundamentally, Dogecoin developers released the network’s core version 1.14.7, on Tuesday, a minor release that amped up security and upgraded node operators. Another relatively recent technical improvement was the introduction of Ordinals on the Dogecoin blockchain, with some developers even releasing popular games that run wholly using dogecoin.

Some in crypto circles say meme tokens may be more attractive to retail investors as as the bull market continues – mainly due to their relevance in popular culture, low unit bias and familiarity.

Meanwhile, data from Coinglass shows shorts or bets against DOGE lost over $40 million in the past 24 hours.

Liquidations occur when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of initial margin. That happens primarily in futures trading, which only tracks asset prices, as opposed to spot trading, where traders own the actual assets.