On April 6, Dogecoin (DOGE) price climbed 7.5% to $0.186, outperforming the broader crypto market, whose gains on the same day were 1.71%.
Dogecoin’s price rally today mirrors bullish moves across the top-ranking memecoin, as shown below, indicating an increasing risk appetite among traders.
The market perceives memecoins as among the most speculative investments within the cryptocurrency sector, primarily due to their minimal underlying value or practical utility. This perspective positions them at the pinnacle of risk, contrasting starkly with traditional safe-haven assets.
Simultaneously, the U. S. dollar, traditionally seen as a bastion of stability, is witnessing a depreciation in its value against a consortium of leading foreign currencies, a trend vividly illustrated by the U.S. Dollar Index (DXY) four-hour chart below.
The chart simultaneously reveals an emerging negative correlation between DOGE and the DXY, underscoring that the dollar’s weakening is momentarily bolstering the appeal of riskier memecoins, primarily on April 6.
Recent data disclosed by Whale Alert reveals that an unidentified wallet address ending in …wwKF has made a substantial acquisition of 199.27 million DOGE through two transactions within the last 24 hours.
The initial transaction saw the wallet purchasing 100 million DOGE, valued at $17.77 million, from Robinhood, followed by a second purchase of 99.27 million coins, equivalent to $17.68 million, from the same platform.
These significant moves quickly captured widespread attention, contributing to a swift increase in DOGE’s price.
However, there has been a recent decline in the number of entities classified as Dogecoin whales, specifically those holding more than 100,000 and 1 million DOGE, showing notable decreases.
It suggests that the market may have overemphasized the significance of the accumulation activities at Robinhood.
The period of Dogecoin’s price rise has coincided with a sharp decline in its perpetual contracts’ open interest (OI) and funding rate.
Notably, the number of outstanding contract positions in the market has dropped to $1.38 billion on April 6 from its March 29 peak of $2.21 billion. It implies that traders are closing their positions, possibly due to various reasons such as taking profits, cutting losses, or reducing exposure.
Meanwhile, its funding rate stands at 0.0172% as of April 6 — significantly lower when compared to its recent high of 0.106% on April 1. This situation often arises when fewer traders are willing to take or maintain long positions or when the market expects the price to stabilize or decrease.
A falling OI and funding rates alongside rising price typically indicates that the selling pressure is decreasing as traders close their short positions, allowing the price to rise even with reduced trading volume and interest.
From a technical perspective, DOGE’s price rise today originates from a support confluence at its 200-4H exponential moving average (200-4H EMA; the blue wave) and an ascending trendline — both at around $0.167.
Related: Is Dogecoin copying the 2020 fractal that sent DOGE price soaring 15,800%?
The bounce from the support confluence is similar to what DOGE witnessed on March 19, which preceded a 85% rally toward $0.22.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.