Dogecoin at $0.094 support – Will DOGE’s price rebound?

DOGE

As a researcher with years of experience tracking crypto markets, I have seen my fair share of volatile rides and unexpected twists. The current situation with Dogecoin [DOGE] is no exception. The recent downturn and reduced whale activity have cast a shadow over DOGE’s future prospects, pushing it towards its previous support level at $0.0841.

Currently, the value of Dogecoin (DOGE) is approaching a price point that previously led to rejection about four weeks back, near the $0.09436. As I write this, Dogecoin is trading at $0.09466.

If the downturn deepens, DOGE could be forced to test the crucial support level at $0.0841.

Historically, when Dogecoin (DOGE) has reached this support point, it usually rebounds, leading to an increase in its price. Nevertheless, AMBCrypto’s examination of recent large-scale transactions hints at a potential downtrend for Dogecoin.

Could the value of DOGE fall below its earlier support level, potentially causing a steeper decrease, or might other traders intervene, anticipating an upward trend instead?

Whale inactivity casts doubt on DOGE’s dominance

Interestingly, recent events have eroded Dogecoin’s memecoin dominance.

As per AMBCrypto’s assessment, heightened competition has hindered the Dogecoin bulls from repeating the bullish momentum experienced towards the end of July, when Dogecoin attempted to break through the resistance at $0.143.

In contrast to March, Dogecoin has seen a downtrend rather than reaching the $0.2 peak again.

Dogecoin at $0.094 support – Will DOGE’s price rebound?

Source : Dune

Furthermore, it’s worth noting that our active weekly users have dropped significantly from 30,000 to fewer than 10,000, which seems to suggest a clear decrease in enthusiasm for Dogecoin.

While other meme coins are garnering attention, Dogecoin is finding it challenging to sustain its leading position.

Spurred by this unexpected change, AMBCrypto investigated the impact that large investors (often referred to as “whales”) could have on potentially reversing the downward trajectory of Dogecoin.

Dogecoin at $0.094 support – Will DOGE’s price rebound?

Source : IntoTheBlock

Interestingly, information from IntoTheBlock shows a noteworthy pattern: Large investors (whales), who possess at least 0.1% of the total Dogecoin supply, have noticeably reduced their on-chain activities starting from early September.

Significantly, there’s been a substantial decrease in outflows from major investors’ wallets, going from 181.29 million to 17.42 million DOGE, which equates to an 80.7% reduction. Also, daily inflows have seen a sharp decline from 229.49 million to 27.96 million DOGE.

As a result, the number of Dogecoin (DOGE) entering large wallets (whales) has significantly reduced to about 10.54 million DOGE, which represents a massive drop by four times compared to the amount recorded the previous day.

In simpler terms, the decrease in whale activity caused Dogecoin to drop by about 6% from its closing price on September 1st, making it less likely for the cryptocurrency to recover during a normally turbulent month.

But, is it too early to say?

On-chain data signals a clear ‘NO’

Instead of big Dogecoin investors being less active day by day, AMBCrypto scrutinized on-chain statistics to examine how actively short-term Dogecoin holders are interacting with the meme coin.

Source : Santiment

It wasn’t a shock that when there was an increase in whales buying cryptocurrencies and flooding exchanges, the number of daily active wallets significantly decreased from 50,000 to 22,000 instead.

Previously, on July 22nd, a significant rejection point for Dogecoin was observed at approximately $0.14, with over 49,000 transactions taking place. However, as we speak, the transaction count has significantly dropped to about 23,000.

Adding to the pessimism, the MVRV ratio has also shifted to negative, indicating that short-term holders are in a loss position. This could lead to increased selling pressure.

Essentially, AMBCrypto observed that a decrease in significant investor involvement (whales) and growing competition from fresh meme-based tokens might potentially slow down Dogecoin’s recovery.

If we don’t see an increase in activity from short-term traders, there’s a possibility that Dogecoin could experience a downward trend, approaching its earlier support level around $0.81 again.

2024-09-02 13:12

Whale inactivity casts doubt on DOGE’s dominance

On-chain data signals a clear ‘NO’

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