Dogecoin suffered a big hit on April 20, popularly known as “Dogeday” thanks to the failed test launch of SpaceX's Starship rocket and the recession in the broader crypto market.
The SpaceX rocket, which featured the Dogecoin mascot on its side, disintegrated four minutes after launch. Still, company employees, including Elon Musk, applauded the failure and expressed optimism for another test in the coming months.
The move comes within a fortnight of Musk's recent stunt when he momentarily changed the Twitter logo to the Dogecoin mascot.
The launch generated considerable excitement within the Dogecoin community. DogeDesigner, a graphic designer in the Dogecoin community, enthusiastically tweeted about the rocket launch.
The launch of the largest rocket on the planet, delayed for the sake of memes.
All hail the meme lord!
—DogeDesigner (@cb_doge) April 18, 2023
However, Dogedday seems to have become a sell-the-news event like the DOGEThe /USD pair lost 11.88% from the day's high of $0.093 to $0.083.
DOGE open interest remains high
Despite the price drop, open interest (OI) volume for Dogecoin futures contracts is above the January 2023 high of $470 million, according to Coinglass data. Open interest volume is the number of open positions in the futures market.
Dogecoin OI volumes soared to a yearly high of $580 million on April 4 after Twitter changed its logo to an image of a Shiba Inu that is also used to represent Dogecoin.
The DOGE/USD pair exhibited significant volatility following the logo change, rising over 21% to a new yearly high of $0.10 on April 4. However, IO price and volumes dropped significantly after the social media platform reverted to its original blue bird logo. The logo change was active between April 4 and 7.
TO report of the cryptanalysis firm, Kaiko, noted:
“DOGE open interest has roughly doubled since Elon Musk took over Twitter last year, suggesting strong capital inflows.”
OI volume for futures contracts dropped to $460 million following a wave of liquidations. However, OI volumes rose again to $533 million, building excitement around the rocket launch.
While DOGE's April 19 price crash led to widespread selloffs of around $104 million, OI volumes are above January 2023 highs, suggesting that the token may experience further volatility.
The long-short ratio of the futures market shows a greater bias towards short orders, acting as a contrarian signal for further upside potential.
At the same time, the funding rate on perpetual swap contracts has turned positive after the dip, raising the possibility of a further dip due to a long contraction.
DOGE price analysis
DOGE whale address supply distribution recorded a spike with addresses with over $10 million in DOGE piling up quickly. However, these whales sold their DOGE immediately after Twitter changed their logo again.
These addresses have repeated the same accumulation and distribution around Dogeday, selling heavily on Dogedday's decline.
The DOGE/USD pair has broken below the parallel uptrend, raising concerns of further downside risk.
Related: Is Dogecoin coming to Twitter? See the market report
Based on the size of the parallel channel, DOGE/USD projects a 15% decline from the current level of $0.083. A drop below this magnitude will coincide with the DOGE support level around $0.072.
The failed launch of SpaceX's Starship rocket on Dogedday, coupled with the fall in the price of Bitcoin, dealt a heavy blow to the price of DOGE.
Despite this setback, the volume of open interest for Dogecoin futures contracts remains high, indicating strong capital inflows. However, the recent price decline and rising DOGE whale sales suggest further downside risks, with the DOGE/USD pair breaking below its upside support.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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