Dogecoin Price Analysis: Will this Signal Halt DOGE’s 40% Rally
thecryptobasic.com 19 July 2024 13:16, UTC Dogecoin price slid to $0.12 on Friday July 19, marking an 8% correction in the last 48-hours, on-chain data beams the spotlight on how DOGE miners recent trading activity may have contributed to the ongoing pullback.
Dogecoin’s 40% Price Rally Halts at $0.13
Over the last 2-weeks Dogecoin price has experienced a relatively positive price performance. The positive swing in US macroeconomic landscape, as well as crypto-friendly candidate Donald Trump taking an early lead in the US 2024 Presidential Campaigns race have shored up investor confidence across the crypto sector.
The memecoin sector has not been left out of this dramatic demand surge. Since the positive CPI data was released on July 5, mega-cap assets like Dogecoin (DOGE) and Shiba Inu (SHIB) have witnessed significant upside.
Dogecoin price had increased by a whopping 40% between July 5 and July 17. But as seen in the chart above, the DOGE price rebound phase halted at the $0.13 level on July 17 and has entered a steep pullback since then.
At the time of writing on Friday, July 19, the DOGE price has now retraced toward the $0.12 area. This reflects an 8% downsizing from the weekly timeframe top of $0.13 recorded on Wednesday.
However, while the DOGE price has retraced considerably in the last 48 hours, other memecoins like PEPE and SHIB have shown more resilience, holding on to their gains from earlier in the week.
Dogecoin Miners Capitalized on Market Rally to Sell-off $84M DOGE
When an asset decouples from its broader sector trend during a market rally, it suggests the presence of some internal bearish catalysts. On-chain movements suggest the Dogecoin miner’s trading activity could be behind DOGE’s recent price correction.
The chart below tracks the real-time changes in DOGE balances held in the custody of recognized miners and mining pools. This metric strategic investors to how quickly miners are drawing down on their reserves and block rewards, and how it could potentially impact short-term price action.
When the market rally began around July 5, Dogecoin miners held a total of 4.44 billion DOGE in their cumulative balances. However, since the demand surge in the wake of positive NFP and CPI data began to lift DOGE, the miners have entered sell-off mode to capitalize on the rising prices.
At the time of writing on July 19, the latest Dogecoin miner reserves have dropped to just 4.37 billion DOGE. This reflects that Dogecoin miners have sold 700 Million DOGE in the last 14 trading days between July 5 and July 19.
Miners are highly influential stakeholders within any Proof of Work (PoW) cryptocurrency ecosystem. When they enter a persistent sell-off frenzy, it spooks existing holders while also discouraging potential new entrants.
More so, they dilute the short-term market supply when they offload newly mined coins into exchanges and trading platforms.
Valued at the current prices, the DOGE miners have effectively diluted the short-term market supply with over $84 million worth of newly mined coins. This explains why DOGE’s price has decoupled from the market trend with an 8% pull-back in the last 48 hours.
Dogecoin Price Forecast: $0.10 Could Be at Risk
Dogecoin (DOGE) is currently trading at $0.11969, showing a slight increase of 0.11% over the past day. The technical indicators suggest that Dogecoin is experiencing some volatility, with significant movements in recent sessions.
The Relative Strength Index (RSI) stands at 50.07, indicating a neutral position, neither overbought nor oversold. This implies that Dogecoin might experience sideways trading in the short term. However, the recent RSI movement indicates potential upward momentum, as it has been rising from oversold levels earlier in the month.
The Parabolic SAR dots are positioned below the current price level, indicating a bullish trend. If Dogecoin maintains this upward trajectory, the first significant resistance level to watch is at $0.1212. Breaking above this resistance could pave the way for further gains towards $0.13 and beyond.
However, traders should be cautious of the support level at $0.0965. If Dogecoin fails to hold above this support, it could revisit lower levels, threatening the $0.10 mark.
In conclusion, while Dogecoin shows potential for further gains, the $0.10 support level remains crucial. Maintaining the bullish momentum above key resistance levels could lead to further upward movement, but a breach of the $0.0965 support might pose risks to Dogecoin’s short-term price stability.
