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How will it affect the price?

Dogecoin (DOGE) holders are now facing losses of 16% compared to the local high of $0.096 recorded on April 4. Despite the recent bullish trend in the altcoin market, Dogecoin miners and institutional investors remain unconvinced of an imminent bullish breakout. How could this affect the price of DOGE in the coming days?

Dogecoin (DOGE) is a decentralized blockchain that deploys a Proof of Work consensus system to validate transactions. Since April 18, the meme coin has been on a sharp downtrend. Significantly, the on-chain data indicates that whale investors and Dogecoin miners are selling. How long will the bears remain in firm control?

Dogecoin miners are selling

Miners on the Dogecoin network appear to be selling their block rewards, indicating their bearish tendencies. Miner Reserves data monitors the amount of a particular cryptocurrency held in the wallet addresses of major miners.

The chart below shows how miners sold 210 million DOGE between April 1st and 25th. According to the current market value of $0.08, the coins sold in April are worth about $16.8 million.

Dogecoin (DOGE) miners reserves. April 2023 Source: IntoTheBlock

The drop in reserves of the two metals can be seen as a bearish signal for several reasons. First, it may indicate that miners are less confident about the cryptocurrency’s price prospects. Hence, they choose to sell DOGE memecoins instead of HODL.

This selling pressure is likely to contribute to a further decline in the price of the cryptocurrency DOGE.

The whales are piling on the selling pressure as well

Likewise, on-chain data reveals that whale investors in the Dogecoin ecosystem have recently begun to deplete their portfolio balances. The Santiment chart below shows that a group of DOGE whales holding 100M COINS and above have strategically dumped 440M COINS, worth approximately $35.2M, over the past 20 days.

Dogecoin (DOGE) whale wallet balances against the price.  April 2023.
Dogecoin (DOGE) whale wallet balances against the price. April 2023 Source: Emotion

This significant drop in miners’ reserves can be seen as a bearish sign for several reasons. First, it may indicate that miners are less confident in the long-term prospects of the cryptocurrency market and are choosing to sell their coins rather than hold them.

This selling pressure could contribute to a drop in the price of the cryptocurrency.

In addition, the decrease in the reserves of the two miners may reflect a decrease in mining activity, which could be a sign of a decrease in the security of the network and a decrease in confidence in the cryptocurrency.

If fewer miners are actively participating in the network, it may be easier for bad actors to carry out attacks like the 51% attack, which could undermine confidence in the cryptocurrency and contribute to lower prices.

DOGE Price Prediction: The $0.07 support level is crucial

According to IntoTheBlock’s Break-Even Price Distribution data, bears are likely to force Dogecoin to drop the DOGE price to $0.076. Which remains the last major support before the downtrend continues.

But for now, the 164,000 addresses that bought 13 billion DOGE tokens are expected to provide significant support around the $0.076 mark.

But if this supports the caves as expected, then DOGE price is likely to drop further towards the next resistance area at $0.069. However, bullish pressure from another 415,000 addresses containing 48 billion coins could halt the decline at this support level.

Dogecoin (DOGE) Parity Price Distribution Data.  April 2023,
Dogecoin (DOGE) Parity Price Distribution Data. April 2023, source: IntoTheBlock

However, the bulls can negate this pessimistic narrative if DOGE price can rally beyond $0.082. But as we saw above, the 175,000 addresses with 2.2 billion tokens in this price range could offer little resistance before a larger pool of sellers comes into play.

The next level of resistance will need to be overcome by the massive 734,000 addresses containing 19.20 billion DOGE with an average bid price of $0.11. A flip through the resistance here could lead DOGE to eventually move towards the $0.15 resistance mark.

Disclaimer

In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.

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