The recent bullish momentum in the cryptocurrency market has propelled many digital assets to higher price levels. Dogecoin (DOGE) has been a notable performer in this regard. Both retail investors and large-scale players have demonstrated their confidence in this meme-based cryptocurrency, leading to a surge in its value.
Confidence Displayed by Dogecoin Whales
Over the last week, DOGE has showcased an impressive performance, witnessing a remarkable 88% increase in its valuation. This surge pushed the memecoin above the $0.42 threshold briefly before experiencing a minor correction after reaching $0.43.
Amidst the price retracement, whales seized the opportunity to accumulate a substantial amount of DOGE. Renowned crypto analyst Ali highlighted this trend through a tweet, indicating that DOGE whales had acquired 140 million DOGE in the past 24 hours, equivalent to approximately $56 million. This considerable accumulation underscored the confidence whales have in Dogecoin.
Moreover, the surge in whale accumulation was complemented by a surge in the number of significant holders. Data from IntoTheBlock revealed a notable increase in the number of addresses holding DOGE valued between $10,000 to $100,000 and $100,000 to $1 million by over 140% and 199% respectively. Additionally, addresses holding over $10 million worth of DOGE spiked by 155% in the last month.
Challenges on the Horizon?
Although the recent spike in whale accumulation led to a positive movement in DOGE’s daily chart, it might not be adequate to sustain its upward trajectory.
The trading volume of DOGE has observed a significant decline in the past few days. A drop in trading volume often signifies an increased likelihood of a shift in the prevailing price trend.
Interestingly, while Dogecoin experienced a price surge, its MVRV ratio decreased. Currently standing at 27.9%, a declining MVRV ratio indicates that short-term holders may be profiting while long-term holders could be at a loss.
Furthermore, data from Coinglass revealed a troubling metric – the long/short ratio for Dogecoin decreased recently. This imbalance suggests a higher number of short positions compared to long positions, hinting at a possible price decline. If a trend reversal occurs, DOGE may witness a minor pullback towards $0.371.
In the scenario of a sustained bullish run, the price of Dogecoin could retest the $0.42 resistance level. Should DOGE break above this resistance, it might trigger a substantial double-digit price rally, as previously reported by CryptoCrypto.