Dogecoinfever is taking over the cryptocurrency world following the token’s impressive rally to three-year highs over the weekend. However, despite optimistic signals that the Shiba Inu-themed token is headed for great success (alongside the rest of the crypto market), some traders remain cautious.
On Monday, the open interest on DOGE options reached an all-time high of approximately $2.74 billion, according to data from CoinGlass. Prior to this week, open interest on DOGE futures had peaked at $2.21 billion in March and had mostly remained below the billion-dollar mark from April until late October.
But is this unprecedented amount of money being bet on a Dogecoin supercycle? Not quite. Additional data from CoinGlass shows that options traders have actually shorted DOGE slightly more than they have taken long positions on the token throughout Monday. In the opening hours of Monday, around 50.75% of the options taken out on DOGE were short positions.
Only in the past hour has this trend shifted slightly towards longs. Nevertheless, approximately half of all DOGE options trades are currently bets that the token’s streak will soon fade.
There are reasons for traders to be confident that Dogecoin still has a long way to go. Since Donald Trump’s return to the White House last week, the world’s first meme coin has nearly doubled in price, a development that has excited analysts about the long-term prospects of the crypto market.
Dogecoin has a particular connection to Trump’s election night victory. Elon Musk, the coin’s most well-known supporter, played a significant role in Trump’s campaign and is expected to play a significant role in the incoming president’s administration. Trump even proposed during his campaign that, if re-elected, Musk would lead a new regulatory agency called the Department of Governmental Efficiency (D.O.G.E.)
It is hard to find a more enticing roadmap for Dogecoin, which has previously seen its fortunes tied to cultural relevance. However, a significant portion of options traders rushing to the token seem to believe that this narrative is too good to be true.
As of now, DOGE is trading at just under $0.32, up over 12% in the last 24 hours and reaching its highest price in three years on Monday morning. The token reached an all-time high of $0.73 in May 2021.
Edited by Andrew Hayward