The price of DOGE has risen sharply, with traders taking on more risk, as the token's value increased by nearly 10% over the past week, briefly exceeding $0.11 before stabilizing at around $0.105. This surge occurred despite a slowdown in the rally of market leader bitcoin, which has fallen below $76,000 after reaching $79,000 earlier in the week.
The significant increase in open interest in DOGE futures, which now stands at 15.36 billion tokens, indicates that traders are pursuing leveraged trades, demonstrating a strong appetite for risk in the market. Data from Coinglass reveals that this is the highest level of open interest in DOGE futures this year, with Binance, Bitget, Bybit, and OKX holding substantial positions, collectively accounting for over 6 billion tokens. The rise in spot price and futures open interest suggests that new investors are entering the market, rather than existing positions being closed, which is seen as a bullish trend for DOGE.
However, this increased exposure also leaves the market more vulnerable to sharp corrections if the momentum reverses. According to Jordan Jefferson, founder of DogeOS and MyDoge, several factors may be contributing to the demand for DOGE, including the addition of over 500 million DOGE by large holders, the listing of a physically backed ETP on Xetra by 21Shares, and the positive flows from Grayscale after a period of outflows. On-chain activity has also increased, with active addresses rising by 28%, which may be driving the price movement.
Historically, DOGE has traded more like a macro meme, with its price responding quickly to changes in spot accumulation, derivatives leverage, and retail narratives. While the payments aspect remains a key factor, it is the least concrete part of the DOGE trade, with Elon Musk's announcement of X Payments, a licensed subsidiary partnered with Visa, potentially influencing traders' decisions, despite no indication of support for dogecoin or any crypto functionality.