Dogecoin (DOGE), the cryptocurrency market's most popular memecoin, is starting to see an increase in short positions.
Data from Coinalyze shows that DOGE's funding rates have started to turn negative since Tuesday, reaching -0.0027% as of Thursday. These levels were previously seen in October 2023. Funding rates can be defined as periodic payments made by traders based on the difference between prices in the futures and spot markets.
While these ratios are not unusually large, they indicate a bearish mood in the market when they continually decrease in line with the decline in prices. DOGE lost 12% in value last week, erasing all the gains it had made since March.
DOGE open position, that is, the number of uncompleted futures contracts, decreased from approximately 800 million dollars on Monday to 611 million dollars as of Thursday. This also indicates a decrease in demand for this token.
Rates briefly turned into the red during a few eight-hour trading sessions in March, but not for an extended period as seen so far this week.
Tokens in the Memecoin sector recorded losses of up to 40% over a seven-day period. Investors are shifting from riskier tokens to Bitcoin and stablecoins.
“When Bitcoin price drops, memecoins not only follow, but lose an even larger portion of their value,” Neil Roarty, an analyst at investing platform Stocklytics, said in an email. “Any plans for a Memecoin summer may have to be put on hold.”
*This is not investment advice.