Memecoin OI increases and market sentiment changes

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Memecoin’s open interest (OI) levels across the crypto ecosystem including DOGE, SHIB, and BONK surged in the 24 hours between November 6 and 7. The indicator indicates an increase in traders’ risk appetite, as meme coins are generally considered riskier than large-cap assets such as Bitcoin and Ethereum.

Memecoin OI increases and market sentiment changes

OI, a measure of the number of open long and short interests on an asset’s trading pairs on derivatives exchanges, is rising. Rising OI signals new or additional capital inflows into the market.

To explain the increase in open interest, it is important to note that traders can open and close positions by buying and selling. Typically, an increase in OI does not mean an increase in asset prices. However, it shows that volatility is increasing. Combining market cycle phases with asset price trends helps identify trading opportunities.

According to Coinglass data, the open interest of SHIB, DOGE and BONK increased by 7.99%, 5.70% and 8.17% respectively.

Typically, in every cryptocurrency market cycle, funds move to DeFi, layer 1 blockchain tokens, and memecoins following Bitcoin and ETH price swings. In a typical market trend where traders’ appetite for risk increases, meme coins are gearing up for a wave of volatility.

SHIB, DOGE and BONK prices have increased by 5% to 17% in the past week, so the price trend is upward.

SHIB, DOGE and BONK Prices: What’s Next?

Technical analyst CryptoKaleo of X (formerly Twitter) recently evaluated the Shiba Inu price chart and concluded that the asset is bullish. The analyst believes that once SHIB price breaks through the August 2023 high of $0.00001135, the memecoin is ready to target a fair value gap above $0.00002000.

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SHIB 1-day price chart | Source: TradingView

Analyzing the DOGE price chart, Kaleo explained that the memecoin has broken out of a multi-month downtrend and is on track to reach the $0.0840 target, as seen on the price chart below.

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DOGE 1 hour price chart | Source: TradingView

BONK price recently broke out of a multi-month downtrend and closed above $0.0000007620. Memecoin has printed 3 green candles in a row and the price is currently above the three long-term exponential moving averages (EMA) of 10, 50 and 200 days at $0.0000007094, $0.0000004225 and $0.0000004716 respectively. If BONK maintains its upward momentum, memecoin may rise by 18% and touch resistance at $0.0000009570.

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BONK Price Chart 1 Hour | Source: TradingView

If the price declines, the $0.0000007421 level could serve as support for BONK. The bullish case for BONK may be invalidated if BONK closes daily below $0.0000007421.

You can check coin prices here.

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