The memecoin sector has made a tepid start to February 2024 after the likes of Shiba Inu down 4%, BONK in the red 9% and PEPE down 5%, all of which have booked sizeable losses between Jan. 31 and Feb. 7.
Can DOGE break the negative market trends and enter a recovery phase?
Dogecoin whales have spent $27 million buying the dip
Compared to its rival mega cap meme coins, Dogecoin price has put up a relatively resilient showing with less than 2% downtrend in the first week of February.
Recent on-chain data trends suggest that strategic whale investors rapidly buying the dip could be behind DOGE’s steady price action in the last two weeks.
Santiment’s supply by addresses metric monitors whale investors trading activity by monitoring real-time changes in large holder wallets. The chart below illustrates that whale wallets with balances between 10 million to 1 billion DOGE held a total of 44.75 billion DOGE coins in their wallets as of Jan 23.
But at the time of writing on Feb. 7, they have increased their cumulative balances to 45.09 billion.
Dogecoin (DOGE) price continues to defend the $0.08 territory since dipping 6% during the crypto market downturn on Jan 23. On-chain data shows that whale investors have capitalized on the price pull-back to acquire millions of dollars worth of DOGE at a discount.
Do the Dogecoin bulls have enough in the tank to stage a decisive attempt to reclaim the $0.1 area this week?
Dogecoin whales enter 260 million buying spree
The crypto market suffered a significant downturn on Jan. 23 amid billion-dollar sell-off from Grayscale ETF investors.
Interestingly, while other mega cap meme coins like Shiba Inu and PEPE and BONK all suffered double-digit retractment, DOGE price maintained a relatively more resilient performance with only a 6% deficit.
Dogecoin on-chain data trail shows that a group of strategic whale investors rapidly buying the dip could be behind DOGE’s steady price action in the last two weeks.
The Santiment chart below depicts real-time changes in the balance of whale wallets holding at least 10 million DOGE (~$800,000).
The blue trend line shows that the whale wallets held a cumulative balance of 44.75 billion DOGE as of Jan. 23. But as the market downturn set-in, rather than join the sell-off they instead entered a buying spree.
The Dogecoin whales have now increased their balances to 45 billion DOGE at the time of writing on Feb. 7.
Effectively, they have capitalized on the memecoin market pullback to acquire 340 million DOGE Jan. 23 and Feb. 7. Valued at the current Dogecoin price of $0.079, the newly acquired coins are worth approximately $26.7 million.
Notably, a closer look at the chart shows that previous DOGE price rallies have often been preceded by a significant buying wave from this specific whale cohort.
Hence, DOGE holders can anticipate another uptrend toward the $0.1 area in the days ahead if this historical pattern repeats.
Speculative traders have also started leaning bullish
After a week of consolidation within the narrow $0.082 – $0.78 range Dogecoin speculative trends are now placing bigger bets on an imminent price breakout.
Santiment’s funding rate trend tracks changes in fees paid by speculative traders to maintain their positions in the derivatives market. The chart below shows that the DOGE funding rate has been on the rise this week increasing from 0.01% on Feb. 3 to 0.08% on Feb 7.
Positive funding rates means that long position holders are paying higher fees to short traders in expectation of booking higher profits when prices move up.
Hence, the rising DOGE Funding Rates this week suggest that, like whale investors, speculative traders are also leaning increasingly bullish this week.
Dogecoin price forecast: $0.085 is the major resistance to beat
Drawing inferences from the market trends analyzed above, the whales buying trend and rising Funding rates signal conviction of an imminent rebound phase in both the Dogecoin spot and derivative markets.
These key factors could put Dogecoin price on the front foot, possibly retesting the $0.01 area in the days ahead. However, the bulls could face major resistance around $0.085 as depicted below by the upper-Bollinger band technical indicator.
However, a decisive breakout above that area, could open the doors to a bullish rally toward $0.10 as predicted.
On the flip side, there’s a chance the bears could negate this narrative if the DOGE price tumbles below $0.07 for the first time in 2024. However, as depicted by the lower Bollinger band, the buy-wall at $0.075 could offer significant support.
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