Dogecoin and Shiba Inu Futures Open Interest Plunges, Signaling a Market Reset

Open interest in Dogecoin and Shiba Inu futures has plunged significantly amid a broader trend across the meme coin sector.

Open interest (OI) in Dogecoin and Shiba Inu futures has seen a sharp decline, according to a report from blockchain analytics firm Glassnode.

Dogecoin futures OI dropped by 58.45% over the past 7 days, falling from $3.58 billion on December 9, 2024, to $1.49 billion today.

A reduction in open interest like this can often suggest lower volatility in the short term, but it can also imply a potential market reset. When speculative interest declines, the likelihood of large, unexpected price swings drops.

Shiba Inu also saw a substantial decline in open interest, dropping 74.41% from $323 million to $83 million.

Meanwhile, PEPE, BONK, and WIF recorded 71.93%, 75.10%, and 69.83% drops, respectively. FLOKI also saw a significant contraction of over 69.18%.

Notably, the widespread nature of this crash indicates that traders are now shifting away from speculative meme coin trades, possibly in response to broader market conditions and recent issues regarding pump-and-dump meme schemes like LIBRA and ELIZA.

Typically, a sharp reduction in futures OI can indicate either a market bottom or a sign of waning investor confidence. As leverage drops, price action could become more stable in the short term.

However, it also means that less speculative capital is flowing into these meme coins, which could slow down any significant recovery rallies.

Particularly, in the case of Dogecoin and Shiba Inu, the current OI drop may lead to reduced price volatility. If traders regain confidence and start building positions again, it could trigger renewed upward momentum.