Analyst Forecasts a Potential 200% Increase in Dogecoin’s Value in the Coming Period
Dogecoin (DOGE) has demonstrated remarkable performance compared to other meme-based cryptocurrencies in the final quarter of this year, achieving gains exceeding 230% at the current time.
A trader known as 52K Skew has expressed optimism about the future trajectory of this canine-themed digital asset.
By applying Fibonacci retracement levels from the support level of $0.05 over three years to the previous all-time high (ATH), it is projected that DOGE could reach $1.16. This would represent an impressive 200% surge from its present value of $0.39.
Strong Demand for DOGE Surpasses Selling Pressure
Nevertheless, the current market dynamics indicate a significant presence of supply stemming from profit-taking by traders and the selling of holdings by miners.
As per data from Santiment, miners have sold off more than 20 million DOGE tokens during the recent surge, leading to a decrease in the amount held by miners from 2.13 billion to 2.11 billion.
However, the selling pressure from miners appears to have been countered by a rise in demand from large investors and other retail participants.
Within the past week alone, whales have accumulated over 150 million DOGE tokens, showing demand that is over seven times higher than the selling pressure from miners.
In addition, miners still possess over 2 billion DOGE, suggesting a positive sentiment towards potential future price increases.
Moreover, a spike in active addresses to an annual peak of more than one million users during the weekend indicates a heightened market interest in this meme-inspired cryptocurrency.
While the number of non-empty wallets experienced a decline of over 24,000 in a single day, indicating extensive profit-taking by retail traders, Santiment views this trend as a positive development for DOGE.
“When the overall number of wallets in a network decreases, it can be a sign of fear, uncertainty, and doubt (FUD) and capitulation among inexperienced traders, often serving as a bullish signal for the coin’s price as these liquidated tokens are likely being acquired by major investors with long-term holding strategies.”
Despite the ongoing profit-taking, with DOGE’s price holding above crucial support levels, there is still potential for further upward movement in the value of this meme cryptocurrency.