Dogecoin, like the rest of the crypto market, has seen a slowdown over the past day, which has greatly impacted its price. However, this slowdown is not entirely limited to price, as the meme con’s interest-weighted open funding rate has seen a significant decline over the past day.
Dogecoin OI Weighted Funding Rate Drops 50%
Over the past few days, as the price of Dogecoin increased, the Financing rate weighted by IO. This is normal, given that the funding rate follows market sentiment. At a time when crypto traders are very bullish, the funding rate is increasing because long traders have to pay short traders to keep their positions open. Then, when sentiment is tilted downward, funding rates tend to fall and short traders pay long traders to keep their positions open.
This is important because funding rates help exchanges keep contract prices and the prices of their underlying assets balanced, regardless of market conditions. These fees are charged at regular intervals by the exchanges, but the duration between each fee varies from exchange to exchange.
That said, this tells us that the decline in the Dogecoin OI weighted funding rate is a display of pessimism on the part of investors. When the Dogecoin Price reached $0.17 on Thursday, the IO-weighted funding rate touched 0.0243%. However, as the price has fallen back towards $0.16, the IO-weighted funding rate has now fallen to 0.0105%, according to data from Coinglass.
This drop represents a drop of more than 50% from Thursday’s numbers and shows how quickly sentiment can turn on a cryptocurrency such as Dogecoin. However, if the price of Dogecoin begins to recover again, the OI-weighted open interest will increase.
Open Interest Falls Alongside DOGE
Amid the Dogecoin price decline, the open interest also took a hit. Its rise to almost a billion dollars on Wednesday May 22 was shaken by a 10% crash which brought it back towards $900 million.
The majority of this decline occurred in the last 24 hours, where Coinglass data shows that the Dogecoin Open Interest experienced massive losses on all major exchanges. The biggest drop in open interest came from crypto exchange Kraken, down 35.94%.
This is followed by YdX with a drop of 18.57% and Coinbase with a drop of 11.36%. Other exchanges saw varying declines between 1.25% and 7.4%, and in total, open interest fell 5.31% over the past day. The total open stake now stands at $907.8 million.
The price of Dogecoin The trend is currently at $0.1587, down 4.59% over the past 24 hours. Honorable mention of Kabosuthe Shiba Inu dog behind the infamous Dogecoin logo, who recently passed away.
Featured image created with Dall.E, chart from Tradingview.com
