Meme Coin Futures Faces Major ‘Deleveraging’: What It Means

Recent data from the on-chain analytics platform Glassnode shows a huge drop in futures Open Interest (OI) across the meme coin sector.

This drop follows speculative price peaks, suggesting a sentiment shift across the meme coin sector and leverage flushing out.

Surprisingly, top memecoins are still trading in the green zone, contracting market expectations due to the ongoing deleveraging.

Glassnode on Meme Coin OI Data

According to Glassnode, open interest across memecoins has experienced major deleveraging since reaching their peaks.

Following the ongoing trend, Dogecoin’s (DOGE) futures OI plummeted by 58.45% to $1.49 billion.

On December 9, DOGE’s futures open interest stood at $3.58 billion, highlighting the recent sharp drop.

Other meme coins, including Pepe (PEPE), Bonk (BONK), and dogwifhat (WIF), also followed similar patterns, with OI cooling off after speculative peaks.

PEPE’s futures open interest fell sharply by 71.93%, dropping from $1.25 billion to $351 million.

Regarding BONK, the futures OI declined 75.10%, falling from $715 million to $178 million.

Likewise, WIF’s OI dropped from $653 million to $197 million, representing a decline of 69.83%.

Amid the speculative frenzy, memecoins experienced rising trade volumes and massive leveraged holdings.

Per CoinGecko data, the total trading volume in the memecoin market increased to over $6.2 billion.

Which Meme coins are Leading the Trend Rebound Game?

Typically, such a huge drop in futures open interest across the memecoin sector shows that traders are reducing their exposure.

Declining prices for major meme coins usually follow this trend.

However, the memecoin market is seeing a bullish rally, with most tokens showing price rebound.

Floki Inu (FLOKI) is the biggest gainer for the day among the top 10 memecoins by market cap.

Within the last 24 hours, the price of FLOKI skyrocketed by over 15.84% to $0.0001039.

The dogwifhat meme stands as another top market performer. The token has experienced a steep 6.7% increase over the past day to trade at $0.62.

BONKcomes close with a 5.17% increase, followed by PEPE with a 4.03% daily surge.

Meanwhile, the price of DOGE is up 3.6% to $0.2513, while Shiba Inu (SHIB) rose 2.6% within the same time frame to $0.00001529.

What to Expect Moving Forward

Technical indicators suggest Dogecoin may drop further below key support levels.

Notably, DOGE has experienced another death cross, as its Market Value to Realized Value (MVRV) ratio fell below its 200-day moving average.

This trend usually suggests a bearish price reversal. The last two times DOGE saw this trend, the price declined by 26% and 44%, respectively.

With the recent death cross appearance, market participants are now closely watching for signs of another downturn. Meanwhile, the Bollinger Bands indicate further downside risk.

Nonetheless, DOGE could defy the bearish trends, especially considering recent discussions about a potential DOGE ETF launch.

Popular asset manager Bitwise Investments recently established a legal entity, BITWISE DOGECOIN ETF, forming the basics of its Dogecoin ETF project.

Meanwhile, PEPE’s current technical indicators suggest a period of indecision. Negative MACD values and bearish crossover suggest this.

However, the Relative Strength Index (RSI) is relatively neutral at 48.15, indicating balanced buying and selling pressure.

Thus, PEPE can see a potential breakout above resistance or a retreat to support at $0.0000095.

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