Declining open interest and daily active addresses signal less demand for DOGE
Dogecoin (DOGE) has experienced a price drop of over 24% after reaching a multimonth peak of $0.28 on July 21. Consequently, the largest holders of the memecoin have been selling off their DOGE during recent price declines, signaling a lack of confidence in a potential recovery in the near term.
Investor interest in DOGE appears to be muted, as indicated by derivatives data. The futures open interest (OI) for Dogecoin has decreased to $3.24 billion following a peak of $5.35 billion on July 22. This 8% decline since Sunday suggests less speculative positioning and fewer traders betting on short-term gains in price.
According to Santiment data, wallets holding between $10-$100 million in DOGE have dropped by 6% since late July.
This trend corresponds with an earlier transaction highlighted by Whale Alert, which noted that 900 million DOGE, valued at over $200 million, was sent to Binance by an unidentified whale, raising concerns about potential short-term selling pressure.
Typically, when large holders distribute an asset during price declines, it indicates their perception of risks for further reductions.
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Meanwhile, the number of daily active addresses on the Dogecoin network has significantly decreased to 58,000, down from a peak of 1.65 million in Q4/2024 and 674,500 in July, suggesting a drop in network activity.
A reduction in active addresses implies lower user engagement on the network, which may reflect diminishing retail interest.
From a technical standpoint, the sell pressure on DOGE could escalate if it breaks below a rising wedge pattern.
In technical analysis, a rising wedge is regarded as a bearish reversal chart pattern that consists of two converging trend lines connecting higher highs and higher lows. This convergence indicates that bullish momentum is waning.
The DOGE price is currently testing the support offered by the lower trendline of the wedge at $0.218.
A breakdown below this level is likely to initiate a more significant price drop, with a technical target for the wedge set at $0.12, representing a 45% decline from current levels.
The relative strength index (RSI) also indicates weakness, having fallen to 49 from overbought conditions of 85 on July 20, revealing that bearish momentum has been steadily accumulating.
As reported, DOGE’s price must remain above the $0.19-$0.20 range, along with the 100-day and 200-day moving averages, to avoid further losses heading toward $0.16.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should perform their own research before making decisions.
