DOGE Skyrockets: $600M Locked in Dogecoin Futures, Highest since April

• Bitcoin Rally Stimulates Risk-Taking in Crypto Market
• DOGE Gains Momentum
• DOGE's Ties to Active Futures and Perpetual Futures
• Funding Rates Escalate
• Considerations for Potential Investors
• DOGE's Recent Surge

Bitcoin Rally Stimulates Risk-Taking in Crypto Market

Bitcoin$42,260 -0.64%'s recent surge has rekindled a risk-taking approach within the cryptocurrency market, leading investors to diversify into non-traditional cryptocurrencies such as dogecoin (DOGE) which was initially launched as a joke a decade ago.

DOGE Gains Momentum

DOGE, known as the leading meme cryptocurrency, experienced an increase of over 10% within the last 24 hours, trading above $0.10 for the first time since April, based on data from TradingView. The prices surged by 27% in seven days, simultaneously with bitcoin's leap from $38,000 to $44,000.

DOGE's Ties to Active Futures and Perpetual Futures

Notional open interest, or the dollar value linked to the number of active futures and perpetual futures contracts associated with DOGE, has expanded by 58% to $625 million in one week, attaining its peak since November 2, 2022, as per CoinGlass data. This boost, in conjunction with a rising price, validates the uptrend.

Funding Rates Escalate

Various exchanges have seen a drastic increase in funding rates to an annualized 50% or more, suggesting a hefty premium in perpetual futures in contrast to spot prices, as illustrated by data from Velo Data. Positive rates display an investor inclination for long, or bullish bets, demonstrating collective confidence that prices will likely inflate.

Considerations for Potential Investors

Humorous cryptocurrencies are high-beta assets with a history of aligning with bitcoin's direction, but in a magnified manner. This implies that such currencies operate as leveraged bets on the most substantial cryptocurrency. Investors, therefore, should remain vigilant of potential pronounced bullish activity in DOGE compared to bitcoin, as a sign of speculative excess usually witnessed at the conclusion of the widespread bullish trend.

DOGE's Recent Surge

Although DOGE's latest surge has been noteworthy, it does not necessarily signify extreme greed, given that the DOGE to BTC ratio remains at bear-market depths. A rapid increase in the ratio preceded BTC's April 2021 peak above $60,000 and the market-wide FTX$3.28 -5.38%-induced panic of November 2022.

Edited by Jonathan Stoker