Dogecoin (DOGE), the most popular meme coin in the cryptocurrency market, has painted the charts green again with its recent upward trend. With significant buying by bullish whales, the price recorded a monthly increase of over 20%, retesting the $0.09 level.
With the rising prices, Dogecoin continues to attract the attention of investors, reaching the highest New Adoption Rate in four months. A 30% increase in the Open Interest indicator suggests that investors have high-risk behaviors that could influence the price movement of the favored meme coin.
Dogecoin (DOGE) price tested the $0.09 level again on Friday morning, recording monthly gains of over 20%. On-chain analysis identifies key indicators that could influence DOGE’s price movement in the coming days.
The DOGE price entered an upward trend on November 17 as cryptocurrency investors flocked to the popular meme coin in both spot and futures markets. How will the price react to investors engaging in high-risk trades?
Crypto whales invested $288 million in November
On November 2, Dogecoin started its upward movement following the annual Doge Day celebrations. Just two weeks later, the price initiated another rally from $0.067 to retest the $0.09 level.
On-chain data reveals that a group of bullish whales, holding significant amounts of DOGE, played a crucial role in the uptrend. The cumulative balance of wallets holding between 10 million to 1 billion tokens, as measured on November 1, was 44.63 billion tokens, as shown in the Santiment chart below.
Interestingly, during Doge Day on November 2, these whales purchased an additional 2.75 billion tokens, increasing their balance to 47.38 billion by November 17.
With the current market price of $0.09, the total value of the newly purchased 2.75 billion tokens is approximately $230 million. Large purchases by whale investors within two weeks often have a positive impact on prices. If whales continue their buying activities, bulls can benefit from extending the rally further.
The number of new investors is increasing
the growing transaction count of new users appears to be another critical factor driving up the Dogecoin price. According to IntoTheBlock data, there has been a significant increase in “New User” transactions in Dogecoin this month.
Notably, Dogecoin’s New Adoption Rate recently reached a four-month high on November 12th, hitting 58.16. Especially with the latest data showing a 34.44% increase, it is well above the 30-day average of 23.41%. This signals that the meme coin continues to attract a substantial number of new participants despite its high prices.
The New Adoption Rate metric measures the percentage of total active addresses that perform their first transactions on a specific day. This provides clear information about the rate at which investors bring new money into the market.
When the adoption of new users increases during a price rise, it means a significant number of new investors are entering the market due to FOMO.
Is FOMO encouraging high-risk behavior among futures traders?
Amidst the positive Dogecoin price performance in spot markets, recent changes in derivative markets triggered early warning signals. According to crypto derivatives data tracker Coinglass, DOGE Open Interest showed an increase of approximately 30% in the last 24 hours.
As shown below, between November 16 and November 17, this data rose from $366 million to $474 million, reaching the highest point in four months.
Open Interest measures the total capital invested in and active in futures contracts. Typically, an increase in this indicator is a bullish signal, indicating that more investors are bringing capital into the markets than those exiting their positions.
However, the 30% increase in the Open Interest indicator during the price rise indicates a higher risk-taking behavior among investors. This means that as the Dogecoin price rises, many investors are doubling their positions to increase their gains.
Historically, such data often signals local price peaks in crypto markets. If this pattern repeats, DOGE prices could enter a correction phase in the coming days.
