Key Points:
Dogecoin whales are selling off large amounts of DOGE, indicating a risk-averse strategy.
The decrease in open interest and daily active addresses suggests a decline in demand for DOGE.
The ascending wedge pattern for DOGE indicates a bearish reversal, with a potential price drop of 45%.
Since reaching a multi-month high of $0.28 on July 21, the price of Dogecoin (DOGE) has fallen over 24%. Consequently, large holders of this meme coin have continued to sell DOGE during the recent price decline, showing a lack of confidence in a price rebound in the coming weeks.
According to derivatives data, investor interest in DOGE remains low. The open interest (OI) for Dogecoin futures peaked at $5.35 billion on July 22 but has since dropped to $3.24 billion. This represents an 8% decline since Sunday, indicating a reduction in speculative positions and a decrease in the number of traders betting on short-term price increases.
Santiment data shows that since the end of July, the number of wallets holding between $10 million and $100 million in DOGE has decreased by 6%.
Whale Alert previously monitored a transaction where an unidentified whale transferred 900 million DOGE (worth over $200 million) to Binance, raising concerns in the market about short-term selling pressure.
Typically, during price declines, large holders choose to diversify their assets, indicating they believe there is still downside risk ahead.
Meanwhile, the number of daily active addresses on the Dogecoin network has significantly decreased, currently at 58,000, down from a peak of 1.65 million in Q4 2024 and 674,500 in July, showing weak network activity.
The reduction in active addresses indicates a decrease in user participation on the network, which may reflect waning retail interest.
From a technical perspective, if DOGE breaks below the ascending wedge structure, selling pressure may intensify, and the speed of price decline could accelerate.
In technical analysis, an ascending wedge is a bearish reversal pattern. It consists of two converging trend lines connecting higher highs and higher lows. This convergence indicates that bullish momentum is weakening.
Currently, the DOGE price is retesting the support level of $0.218 at the lower boundary of the ascending wedge.
If this support level is breached, the price is likely to drop significantly further, with the technical pattern targeting $0.12, representing a 45% decline from the current price.
The Relative Strength Index (RSI) also shows signs of weakness, having fallen from the overbought zone of 85 on July 20 to 49, indicating that bearish momentum is continuing to build.
According to Cointelegraph, the DOGE price needs to hold the range of $0.19-$0.20, or the 100-day and 200-day moving averages, to avoid further declines to $0.16.
Related: Even with BTC down, Bitcoin futures demand is still rising: What’s behind it?
Original: “Dogecoin Whales Are De-risking as DOGE Price Faces 45% Drop Risk”
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