After a prolonged downtrend, Dogecoin is showing tentative signs of a potential reversal. The meme-inspired cryptocurrency briefly reclaimed the psychologically significant $0.10 level, fueled by a substantial surge in trading activity. However, analysts caution that the recovery remains precarious, with sellers still posing a significant threat to upward momentum.
Derivatives Traders Bet on Further Gains
A clearer bullish sentiment is emerging in the derivatives market, contrasting with mixed signals from spot trading. Futures and options trading volume increased by 72%. Notably, the total Open Interest—representing the value of all unsettled contracts—rose by 7% to $1.05 billion. The positioning of leveraged traders reveals a strong bias toward further price appreciation. On Binance, the Long/Short Ratio stands at 1.98, meaning nearly two long positions exist for every short. This skew is even more pronounced on the OKX exchange, where the ratio reaches 2.63.
Surging Volume Masks Underlying Selling Pressure
Dogecoin reached a local peak of $0.106 before its rally stalled, currently trading at $0.099 for a 24-hour gain of 7.43%. This move was accompanied by an explosive 72% jump in spot trading volume, which hit $3.36 billion. A deeper analysis of on-chain transaction data, however, uncovers a concerning trend. During this period, sell orders for 256 million DOGE tokens outpaced buy orders of 244 million, creating a negative net delta of 12 million units. This suggests a significant number of investors are using the price rebound as an exit opportunity. Key technical levels to watch are support at $0.093 and a bullish target at $0.14.
The options market presents a conflicting narrative. Despite a 90% surge in trading volume, the Open Interest for Dogecoin options contracts fell by nearly 49%, indicating uncertainty and potentially shorter-term speculative activity.
Should investors sell immediately? Or is it worth buying Dogecoin?
Structural Inflation: Dogecoin’s Persistent Headwind
Beyond short-term price fluctuations, Dogecoin continues to face a fundamental economic challenge: its uncapped supply. The network emits 5 billion new tokens annually, creating persistent inflationary pressure. Sustaining or increasing its price requires constant demand growth to offset this steady dilution—a tall order for an asset whose primary value driver has historically been its meme status.
A recent development on the utility front offers a glimmer of progress. Coinbase has approved Dogecoin as collateral for institutional loans. Through the Morpho protocol, qualified users can now borrow up to 100,000 USDC against their DOGE holdings without triggering a taxable sale. This integration provides the cryptocurrency with a foundational use case in decentralized finance (DeFi).
A Contrarian Move Amid Widespread Fear
With a market capitalization of $16 billion, Dogecoin has declined 52% over the past twelve months. The current volume spike appears somewhat isolated within the broader digital asset landscape. The total cryptocurrency market cap remains stagnant at $2.35 trillion, while the widely-followed Fear & Greed Index continues to signal “Extreme Fear.” Whether the present buying interest marks the start of a durable trend reversal or merely a temporary technical correction will likely be determined in the coming days. The battle for the $0.10 price level is set to serve as the critical litmus test.
Ad
Dogecoin Stock: Buy or Sell?! New Dogecoin Analysis from February 28 delivers the answer:
The latest Dogecoin figures speak for themselves: Urgent action needed for Dogecoin investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 28.
Dogecoin: Buy or sell? Read more here...