Memecoin Frenzy: 4 out of Top 10 in Crypto Open Interest Rankings
Crypto News- The memecoin frenzy has been the highlight of the crypto community during this bull market season. In just a year since their launch, Pepe and WIF have rocketed into the top 20 cryptocurrencies by market capitalization.
These memecoins have also made waves in the crypto leverage market, where traders speculate on their price movements by going long or short.
Remarkably, four out of the top 10 cryptocurrencies by open interest (OI) are memecoins. Leading the pack is Pepe (PEPE), boasting $812.6 million in OI, which is nearly half of Solana’s (SOL) $1.7 billion in OI.
Top Memecoins in the Market
Besides Pepe, Dogecoin (DOGE), Bonk (BONK), and Dogwifhat (WIF) have also secured their spots in the top 10. Bitcoin (BTC) tops the chart with a staggering $11.1 billion in OI, followed by Ethereum (ETH) at $9.15 billion. The gap between the highest and lowest OI is substantial: Bitcoin’s OI is $11 billion, whereas Near Protocol (NEAR), in tenth place, has just $230 million in OI, highlighting the significant disparity in trader interest.
The surge in OI for memecoins is driven by recent bullish momentum. Pepe reached a new all-time high, and WIF soared to a multi-week high above $3.30.
Understanding Open Interest
Open Interest represents the total number of unsettled derivative contracts. Each contract requires both a buyer and a seller. A contract is considered “open” from the moment it’s created until it’s settled by the counterparty. OI increases with new contracts and decreases when contracts are settled. Unlike trading volume, OI is continuous data, with rising OI indicating bullish momentum as traders open more contracts in anticipation of price movements.
Negative Funding Rates Despite Price Surge
Despite the rise in memecoin prices and OI, funding rates have remained negative across crypto exchanges. Funding rates reflect the cost of maintaining a position in a perpetual swap or futures contract relative to the asset’s spot price. Positive funding rates indicate bullish sentiment, while negative rates signal bearish sentiment.
Memecoin Frenzy FAQ
What is driving the popularity of memecoins like Pepe and WIF?
The popularity of memecoins like Pepe and WIF is largely driven by social media hype, community support, and their novelty factor. These coins often start as jokes or memes but can gain serious traction as more people buy into the fun and potential for high returns.
How have Pepe and WIF performed in the market recently?
Pepe and WIF have performed remarkably well, rocketing into the top 20 cryptocurrencies by market capitalization within just a year of their launch. Their success is reflected in their significant open interest (OI) and price surges, with Pepe leading memecoins in OI and hitting new all-time highs.
What does open interest (OI) mean in the context of cryptocurrencies?
Open interest (OI) represents the total number of unsettled derivative contracts, such as futures and options, that are active in the market. It indicates the level of interest and activity among traders. Rising OI typically suggests bullish sentiment as more traders enter the market expecting price movements.
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