Dogecoin threatens another decline after testing key support

Some analysts suggest that the Binance exchange is stopping DOGE withdrawals as a catalyst for the recent pullback, but the data suggests that an overheated derivatives market could be a major factor.

Dogecoin (DOGE) is in danger of losing vital support if it deviates from an ascending channel that has been trading for the past 53 days. While technical analysis is not as precise, a daily close below $ 0.26 would likely invalidate the current move.

Dogecoin threatens another decline after testing key support

DOGE / USD price chart | Source: TradingView

In addition to the opposing trends in Bitcoin (BTC), DOGE underwent a software upgrade this week and users were asked to deploy version 1.14.5. There are two important security patches: “Remote Code Execution in Dogecoin QT” (CVE-2021-3401) and “Unix Platform Sensitive Information Exposure” (CVE-2019-15947).

The latest upgrade completes the new minimum fee proposal after reducing the forward and mining standards of the previous version. Other changes include updated Berkley DB and OpenSSL and SLIP44 compatibility for HD wallet discrepancies.

Binance crashes after the upgrade

Although users and developers had no problems with the changes, the Binance exchange unexpectedly suspended all payouts on the Dogecoin network in November. Bitcoin magazine reported.

Michilumin, a core developer at Dogecoin, stated that Binance had pending transactions due to insufficient fees in previous years. Despite the recommendations of the DOGE developers, Binance was not able to redirect such inactive transactions to its own wallet.

“Yes, we know. The situation at Binance is when a Dogecoin-Tx did not have enough fees years ago, they simply reissued these transactions (did not do an RBF or something similar) and assumed that the transactions were not chargeable they stay “stuck” for all eternity. “

When the upgrade 1.14.5 successfully lowered the fees, these pending transactions were eventually approved without Binance knowing about it.

Oddly enough, in February, CEO Changpeng Zhao, expressed Concern that Dogecoin will be “centralized” and “abandoned”.

“Some of the benefits / risks of Doge:

  • Pros: Great, fun, gets Elon Musk PR. Decentralized in the sense that there is no “core team”. It was given up.
  • Risk: 1 address holds 27% of the entire DOGE. The top 20 addresses hold more than 50% of the entire DOGE.

The futures market may have driven the DOGE correction

Undoubtedly, the news of Binance’s withdrawal contributed to the recent drop in the price to $ 0.25. However, it is also possible that the derivatives market may play a role as Dogecoin Open Interest (OI) faces huge opposition.

Dogecoin threatens another decline after testing key support

Dogecoin Futures OI Summary | Source: CoinGlass

In contrast to volume data, futures open interest provide a better picture of the overall risk of investors. Regardless of the trading activity, which can go down once the price fluctuates, the OI will stay high as long as the players hold their positions.

Dogecoin threatens another decline after testing key support

DOGE / USD price chart | Source: TradingView

Note that the previous four attempts to break the $ 1 billion open interest mark resulted in a significant price correction. Right now the number is $ 850 million, the same could happen this time.

However, a 17% rally to the $ 0.30 mark should bring the DOGE derivatives index back to the dreaded open interest of $ 1 billion. In addition, traders can also reopen leveraged positions and increase the open interest regardless of price changes.

So the classic “chicken first or egg” problem arises: Is Binance the cause of the most recent crash under the 53-day ascending channel or is it caused by an overly leveraged position level?

Whatever the cause, DOGE traders should keep a close eye on this derivative indicator to avoid further surprises.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Teacher

According to Cointelegraph

Dogecoin threatens another decline after testing key support

Some analysts suggest that the Binance exchange is stopping DOGE withdrawals as a catalyst for the recent pullback, but the data suggests that an overheated derivatives market could be a major factor.

Dogecoin (DOGE) is in danger of losing vital support if it deviates from an ascending channel that has been trading for the past 53 days. While technical analysis is not as precise, a daily close below $ 0.26 would likely invalidate the current move.

Dogecoin threatens another decline after testing key support

DOGE / USD price chart | Source: TradingView

In addition to the opposing trends in Bitcoin (BTC), DOGE underwent a software upgrade this week and users were asked to deploy version 1.14.5. There are two important security patches: “Remote Code Execution in Dogecoin QT” (CVE-2021-3401) and “Unix Platform Sensitive Information Exposure” (CVE-2019-15947).

The latest upgrade completes the new minimum fee proposal after reducing the forward and mining standards of the previous version. Other changes include updated Berkley DB and OpenSSL and SLIP44 compatibility for HD wallet discrepancies.

Binance crashes after the upgrade

Although users and developers had no problems with the changes, the Binance exchange unexpectedly suspended all payouts on the Dogecoin network in November. Bitcoin magazine reported.

Michilumin, a core developer at Dogecoin, stated that Binance had pending transactions due to insufficient fees in previous years. Despite the recommendations of the DOGE developers, Binance was not able to redirect such inactive transactions to its own wallet.

“Yes, we know. The situation at Binance is when a Dogecoin-Tx did not have enough fees years ago, they simply reissued these transactions (did not do an RBF or something similar) and assumed that the transactions were not chargeable they stay “stuck” for all eternity. “

When the upgrade 1.14.5 successfully lowered the fees, these pending transactions were eventually approved without Binance knowing about it.

Oddly enough, in February, CEO Changpeng Zhao, expressed Concern that Dogecoin will be “centralized” and “abandoned”.

“Some of the benefits / risks of Doge:

  • Pros: Great, fun, gets Elon Musk PR. Decentralized in the sense that there is no “core team”. It was given up.
  • Risk: 1 address holds 27% of the entire DOGE. The top 20 addresses hold more than 50% of the entire DOGE.

The futures market may have driven the DOGE correction

Undoubtedly, the news of Binance’s withdrawal contributed to the recent drop in the price to $ 0.25. However, it is also possible that the derivatives market may play a role as Dogecoin Open Interest (OI) faces huge opposition.

Dogecoin threatens another decline after testing key support

Dogecoin Futures OI Summary | Source: CoinGlass

In contrast to volume data, futures open interest provide a better picture of the overall risk of investors. Regardless of the trading activity, which can go down once the price fluctuates, the OI will stay high as long as the players hold their positions.

Dogecoin threatens another decline after testing key support

DOGE / USD price chart | Source: TradingView

Note that the previous four attempts to break the $ 1 billion open interest mark resulted in a significant price correction. Right now the number is $ 850 million, the same could happen this time.

However, a 17% rally to the $ 0.30 mark should bring the DOGE derivatives index back to the dreaded open interest of $ 1 billion. In addition, traders can also reopen leveraged positions and increase the open interest regardless of price changes.

So the classic “chicken first or egg” problem arises: Is Binance the cause of the most recent crash under the 53-day ascending channel or is it caused by an overly leveraged position level?

Whatever the cause, DOGE traders should keep a close eye on this derivative indicator to avoid further surprises.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Teacher

According to Cointelegraph

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