Dogecoin (DOGE) is potentially at risk of losing critical support if the toll falls from the ascending channel traded in for the last 53 days. Although technical analysis is non an exact science, a daily close below $0.26 will likely invalidate the electric current motility.

DOGE/USD price at FTX. Source: TradingView

Aside from the Bitcoin (BTC)-driven headwinds, which are weighing on DOGE price, the meme token this week underwent a software upgrade, and users were requested to implement version 1.14.5. Ii important security patches were involved: "Remote Lawmaking Execution in Dogecoin QT" (CVE-2021-3401) and "Sensitive Information Exposure on Unix platforms" (CVE-2019-15947).

The latest release finalized a new minimum fee recommendation, post-obit a previous version'southward reduction of relay and mining defaults. Additional changes included Berkley DB and OpenSSL updates and SLIP44 compatibility for the HD wallet difference path.

Binance faced issues after the upgrade

Fifty-fifty though users and developers did not experience any setbacks from the changes, crypto exchange Binance unexpectedly suspended all Dogecoin network withdrawals on November. 11.

"Michilumin," a Dogecoin core developer, explained that Binance had awaiting transactions due to bereft fees for a couple of years. Despite recommendations by DOGE developers, the substitution failed to redirect those dormant transactions to their ain wallets.

Every bit the 1.fourteen.5 upgrade successfully lowered fees, those pending transactions were eventually approved, unbeknownst to Binance.

Curiously, in February, Binance founder Changpeng Zhao expressed concerns about Dogecoin existence "centralized" and "abandoned."

Futures markets could have fueled DOGE'due south correction

Surely enough, the Binance withdrawal restriction news could have been behind the contempo toll weakness down to $0.25. Even so, it's as well possible that derivatives markets played an important office, every bit Dogecoin'southward open up interest was facing a key resistance.

Dogecoin futures aggregate open up interest. Source: CoinGlass

Unlike volume information, futures contract open interest provides a better picture of investors' full risk exposure. Regardless of the trading activity, which tin can momentarily sacrifice after stiff price movements, open involvement will remain high equally long as players keep their positions adrift.

DOGE/USD cost on FTX, log calibration. Source: TradingView

Notice how the previous four attempts to interruption the $i billion futures open interest mark resulted in substantial price corrections. Currently, the indicator stands at $850 million, so the imminent risk seems in the past.

Yet, a 17% positive toll movement to $0.xxx could potentially bring the DOGE derivatives metric back to the feared $1 billion open interest. There's also the possibility of traders reopening their leverage positions and inflating the open involvement regardless of the price change.

Therefore, the classical chicken-and-egg problem stands before us: Was Binance's issue the leading crusade for the recent crash below the 53-day ascending channel, or was it bound to happen due to excessive leverage positions?

Either way, DOGE traders should keep a close eye on this derivatives indicator to avert farther surprises.

The views and opinions expressed here are solely those of the author and exercise non necessarily reverberate the views of Cointelegraph. Every investment and trading move involves risk. You should acquit your own research when making a conclusion.