Meme tokens surge as traders stake on blockchain futures

142

29th February 2024 – (New York) Traders have been leveraging popular meme-based cryptocurrencies, notably Dogecoin (DOGE) and Bonk (BONK), to place ecosystem wagers on their underlying blockchains, Ethereum and Solana respectively. The enthusiasm has propelled DOGE futures to unprecedented heights, with open interest crossing the $1 billion threshold, signifying robust engagement in the market.

The surge in Dogecoin’s value echoes the wider cryptocurrency market’s uptick, with DOGE experiencing a dramatic 40% climb prior to a slight pullback within the last day. This rally has overshadowed the broader CoinDesk 20 index’s modest 7.8% increase during the same timeframe. The ascent of Bitcoin (BTC) to heights above $63,000 from $59,000 has also contributed to the positive market dynamics.

According to data from Coinglass, there has been a significant 54% rise in unsettled DOGE futures since Wednesday, marking a historic peak in speculative interest in the token. This surge in open interest reflects fresh capital influxes into the market, with a dominant 70% of traders adopting a bullish stance, anticipating further price ascents for DOGE.

The token’s technical indicators, particularly the Relative Strength Index (RSI), have reached levels typically considered ‘overbought’, a signal that often precedes potential price corrections.

Underpinning the speculative fervour, the Dogecoin network has witnessed modest but meaningful technical enhancements, including the release of its core version 1.14.7, which bolstered security and updated node operations. Moreover, the Dogecoin blockchain embraced the introduction of Ordinals, catalysing developer interest and even enabling the operation of games entirely through the DOGE currency.

The meme token phenomenon, amplified by cultural traction and the appeal of lower-priced units, continues to draw the attention of retail investors, particularly in a bullish market context.

Conversely, those betting against DOGE faced over $40 million in losses over the same period, as revealed by Coinglass. Such liquidations typically occur when exchanges are compelled to close traders’ leveraged positions due to a significant reduction or complete erosion of their initial margin. This is a common safeguard in futures trading, which differs from spot trading where the actual assets are held by traders.