By Key Points
- Dogecoin whales bought over 1 billion DOGE in 24 hours.
- Despite whale activity, social metrics around DOGE are bearish.
- DOGE’s price tests key resistance at the 20-day SMA.
- A breakout could lead to gains, but failure could mean a drop to $0.092.
The world of Dogecoin has seen some exciting developments recently, especially involving Dogecoin whales. Over the past week, the meme coin has faced a rollercoaster of price drops, sliding over 13%.
However, in the last 24 hours, there has been a slight recovery, with DOGE bouncing by 3%, reaching a price of $0.1077.
One of the reasons behind this recovery could be the massive movement by Dogecoin whales, who have been buying big.
According to popular crypto analyst Ali, these whales acquired over 1 billion DOGE, equivalent to around $108.7 million.
The belief among these big players is that Dogecoin is poised for a rally, making them confident enough to make large investments.
Dogecoin whales buy up 1 billion DOGE: Is it enough to fuel a rally?https://t.co/CXOWvJ4Rdj
— John Morgan (@johnmorganFL) October 4, 2024
Will the actions of Dogecoin whales lead to a price rise?
The question on every investor’s mind is whether this large-scale purchasing by Dogecoin whales is a sign of things to come.
Historically, when whales make significant moves, it often indicates an anticipated rise in price. However, while the whale activity points to confidence, other signals tell a different story.
Dogecoin’s social metrics are one area that is concerning. According to data from Santiment, social dominance for DOGE has been on a decline, meaning fewer people are talking about or engaging with the coin.
This could reflect a loss of community interest, which is crucial for meme coins like Dogecoin which thrive on hype and community support.
Adding to this, the weighted sentiment around DOGE has also turned bearish, showing that investor confidence is waning. Despite the whale movements, many in the broader market are not convinced that Dogecoin’s price surge will last.
Can Dogecoin whales sustain their influence on the market?
While Dogecoin whales continue to buy in large quantities, other market indicators suggest caution. One such indicator is the MVRV ratio, which has dropped sharply.
This ratio compares the market value of Dogecoin to its realized value and is a useful tool to gauge whether the coin is being overbought or undersold.
The current drop in the MVRV ratio indicates that the majority of DOGE holders are seeing less profit, potentially leading to increased selling pressure.
Furthermore, the memecoin’s velocity has decreased, meaning fewer people are using Dogecoin in transactions. This drop in usage is another bearish signal, suggesting a lack of interest in utilizing DOGE for trades or purchases.
On the technical side, Dogecoin is currently testing a key resistance level near its 20-day Simple Moving Average (SMA). If DOGE can break above this threshold, it could signal the start of a bull rally.
However, if it fails to breach this level, the coin could experience further losses, potentially dropping to $0.092.
Will Dogecoin whales help push DOGE higher or trigger a crash?
The actions of Dogecoin whales will be crucial in determining the coin’s near-term future.
Their recent purchases show faith in the memecoin’s potential, but the broader market remains cautious. With declining social sentiment, a dropping MVRV ratio, and lower transaction velocity, the signs are mixed.
The price of Dogecoin could either rally if it manages to break through key resistance, or it could fall further if it fails to hold.
Investors should watch closely to see whether Dogecoin whales can continue to influence the market or if their efforts will fall short against bearish momentum.
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