- Dogecoin’s price has seen a 20% increase over the past week, reaching $0.068, largely influenced by significant whale activity during this period.
- Despite the current high prices, on-chain data suggests a bullish outlook with active buying orders exceeding sell orders, hinting at potential further gains.
Dogecoin (DOGE), a prominent player in the meme coin category of cryptocurrencies, has recently showcased a remarkable market performance, reclaiming the $0.068 territory. This 20% weekly gain comes just two weeks after the asset hit a yearly low of $0.057 on October 14. The financial ecosystem was abuzz with speculation and analysis, as market participants sought to understand the forces behind this swift turnaround.
Whale Activity Peaks: A Catalyst for Change
The significant recovery in DOGE’s price can be closely tied to a spike in whale activity, as on-chain data between October 14 and October 25 illustrates. The term ‘whale’ in cryptocurrency refers to individuals or entities that hold large amounts of a particular cryptocurrency. Their trading activities can have a substantial impact on the market due to the sheer volume of assets they control.
During this 11-day window, Dogecoin experienced a phenomenal resurgence in demand from these whale investors, driving the price up from its yearly low. Specifically, on October 15, the number of whale transactions (transactions exceeding $100,000) was a mere 599. Fast forward to October 24, and this number had surged to 1,420 – the highest level since July 25. This heightened activity from whales is a bullish signal, fostering confidence among retail investors and providing liquidity that allows for efficient trade execution and favorable pricing.
Despite the surge in whale transactions and the corresponding price recovery, the question on many minds is whether these major players will continue to push for gains or start to consolidate their positions.
Demand Outpaces Supply: A Bullish Outlook
Turning to the aggregate order books from top cryptocurrency exchanges, including Binance and Coinbase, the current scenario appears to favor the bulls. There are active orders to purchase 782 million DOGE, surpassing the active sell orders, which stand at 740 million DOGE. This excess demand, exceeding supply by over 38 million DOGE, creates a market condition where sellers might have to increase their prices to fulfill orders, potentially leading to further price gains.
Given the robust whale activity and strong market demand for Dogecoin, all signs seem to point towards a continuation of the current upward trajectory. However, it is important to note the potential resistance around the $0.075 mark, as indicated by the Global In/Out of the Money data. Here, a significant number of addresses purchased DOGE at an average price of $0.075, and their potential profit-taking could introduce bearish pressure.
In contrast, a failure to maintain the current momentum and a slip below the $0.050 mark could tip the scales in favor of the bears. However, with a strong support buy-wall anticipated around $0.060, the bulls might have a fighting chance to maintain control and continue DOGE’s upward journey.