Dogecoin whale activity and bullish technicals point to potential upside

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Over the last seven days, Dogecoin experienced a notable increase of around 20%, fueled primarily by large investors (whales) purchasing over $6 billion worth of DOGE. This surge was mainly influenced by robust optimistic technical signals.

Analyst Ali Martinez posted on X that it is said whales purchased approximately 1.08 billion Dogecoin (DOGE) on January 3rd. At the time, this transaction was equivalent to around $413 million.

On the next day, another unidentified party moved 5 billion DOGE, equivalent to around $2 billion, to a yet undisclosed wallet, thereby becoming the fourth-largest owner of the meme cryptocurrency.

According to data from Santiment, there’s been a rise in large-value transactions involving Dogecoin over the last seven days.

Accumulation by whales (large investors) is generally considered a strong positive indication for an asset, because these experienced investors are usually adept at spotting market tendencies and investing wisely in assets that show promise for substantial future returns.

Additionally, it’s worth noting that the number of daily active addresses for this meme coin has surged over the past week, suggesting a rise in investor engagement. This increase in activity often points towards optimistic investor attitudes and a thriving network infrastructure.

Dogecoin garnered attention from investors following the announcement by a publicly traded Canadian investment company, Spirit Blockchain Capital, of their intention to utilize their Dogecoin assets to produce returns through a specialized program.

One reason behind Dogecoin’s recent surge is the buzz surrounding Elon Musk’s proposed integration of a payment system on his X platform. Known as a long-time supporter of Dogecoin, Musk has expressed his backing by briefly accepting DOGE for Tesla transactions and repeatedly promoting the meme coin on social networks. There’s speculation that DOGE could be an option for payments on ‘X Money’, potentially joining Bitcoin and other digital currencies in the process.

In just a few days, the number of outstanding contracts for Dogecoin (DOGE) has significantly increased by more than 50%. This surge suggests that traders dealing with derivatives are showing a growing interest in this altcoin. As reported by CoinGlass, DOGE’s open interest jumped from $2 billion on Dec. 1 to $2.97 billion on Dec. 6.

DOGE rally could continue

For Dogecoin (DOGE), technical signs are optimistic. On a one-day scale, its price continues to hover over both the 50-day and 200-day Exponential Moving Averages, indicating that market forces favor the buyers at this time.

Additionally, the Moving Average Convergence Divergence (MACD) and Price Oscillator lines are rising, usually signaling that Dogecoin (DOGE) might continue to surge in the upcoming weeks. This upward trend could potentially reach its resistance level at around $0.41. If DOGE manages to break through this barrier, it may even approach its 2024 peak of $0.47.

According to Coinglass, January is traditionally Dogecoin’s most lucrative month. Some financial experts, including Alex Thorn from Galaxy Digital, predict that Dogecoin (DOGE) could reach the much-desired $1 mark by the close of 2025.

Dogecoin, the long-standing and popular meme cryptocurrency, is expected to reach a value of $1. This milestone would also mark a significant achievement as its market capitalization would surpass the staggering $100 billion. Yet, it’s important to note that this market cap could be overshadowed by the Department of Government Efficiency, which is projected to implement savings exceeding the value of Dogecoin.

— Galaxy (@galaxyhq) January 2, 2025

As a researcher delving into the cryptocurrency market, I’ve noticed that the upcoming Dogecoin rally could encounter some hurdles. According to Santiment’s analysis, the weighted social sentiment for Dogecoin stands at -0.60, suggesting a prevailing pessimism among investors about its immediate price growth prospects.

This pessimistic mood might temporarily halt progress, yet it offers a chance for traders who go against the flow to seize opportunities based on the market’s cautious stance.

Currently, Dogecoin (DOGE) has risen by 20% over the past week, trading at approximately $0.3825. Its market capitalization stands at a substantial $56.5 billion as of this writing. In comparison to other notable meme coins such as Shiba Inu (SHIB), Pepe (PEPE) and Bonk (BONK), Dogecoin has outperformed by a significant margin, with SHIB, PEPE, and BONK recording gains of 10%, 12.3% and 5% respectively over the same timeframe.

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2025-01-06 13:15