Why is Dogecoin price up today?

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Dogecoin (DOGE) price has soared by 15% over the last 24 hours to trade at $0.1543, reflecting the ongoing recovery across the wider crypto market.

DOGE/USD daily chart. Source: TradingView

This performance in DOGE price is backed by a mix of fundamental and on-chain metrics, including increasing futures open interest and whale activity.

Let’s investigate the factors driving DOGE’s price today.

Dogecoin price pumps after Coinbase news

DOGE’s price started rallying after news emerged that Coinbase, a U.S.-based cryptocurrency exchange, was planning to introduce futures trading for DOGE alongside Litecoin (LTC) and Bitcoin Cash (BCH).

In a March 7 letter to the Commodity Futures Trading Commission (CFTC), Coinbase Derivatives submitted its proposal for a monthly cash-settled futures contract for Dogecoin.

Coinbase’s proposal to DOGE futures listing. Source: CFTC

In the letter addressed to CFTC Secretary Christopher Kirkpatrick, Coinbase explains the size of the contract, the stricture of the contract and methods of settlement.

A noteworthy point is the letter said that the exchange could list the DOGE futures contract under CFTC Regulation 40.2(a), which allows it to proceed with the listing without any official approval from the CFTC through “self-certification.”

The letter explained that the “self-certification” route allows Coinbase Derivatives to list the DOGE futures contract as long as it adheres to the CFTC regulatory guidelines.

Coinbase confirmed this in a March 21 post on X, asking its users to be on the lookout for when these contracts will be available for trade on partner platforms.

Source: Coinbase Institutional

This, however, raises interesting regulatory questions, given that the U.S. Securities and Exchange Commission recognizes all cryptocurrencies stemming from Bitcoin as commodities, as opined by Bloomberg analyst James Seyffart.

Source: James Seyffart

Dogecoin open interest surpasses $1 billion

DOGE’s performance over the last 24 hours also coincides with a spike in futures open interest (OI). Data from Coinglass shows that OI in DOGE has surged by 27.5% over the last 24 hours. This surge has seen the OI cross the $1 billion mark to rest at $1.17 billion at the time of publication.

Dogecoin futures open interest. Source: Coinglass

Open interest refers to the number of open positions in options contracts. It gives insights into the liquidity, demand and price movements of an asset. The increase in DOGE’s OI reflects the interest pro traders have in the memecoin, which is positive for its price.

Related: BlackRock receives memecoins, NFTs after depositing $100M USDC onchain

Whale activity backs DOGE’s rally

After the latest marketwide correction that saw billions of dollars liquidated, DOGE sank as low as $0.125 and is currently 10% down on the weekly timeframe. However, the uptick in whale transaction volume marks a bullish signal for Dogecoin.

Whale transactions are large transactions that involve the transfer of $100,000 or more worth of DOGE. According to on-chain data analytics firm IntoTheBlock, the number of DOGE transactions worth between $100,000 and $1 million has increased by approximately 92% over the past 24 hours.

Dogecoin: Number of transactions by size. Source: IntoTheBlock

Similarly, the data also shows that the number of DOGE transactions larger than $1 million has increased by more than 600% in the last 30 days.

In a March 21 post on X IntoTheBlock said,

“This is not only a massive increase, but it also marks the highest number of Dogecoin millionaire transactions since the $DOGE top in May of 2021!”

This increase in whale activity shows the confidence large investors have in the network, a trend that appears to move in tandem with the price of the target memecoin by market capitalization.