Dogecoin has retraced 24% since rejecting $0.010 in early February. A closer look at the on-chain data shows that DOGE is showing signs of bullish momentum. Could the Recent Accumulation Trend Among Dogecoin Miners Propel DOGE to Another Long Rally?
DOGE has been flying under the radar despite the recent surge in price.
Dogecoin Miners Are Positioning For Future Gains
Dogecoin (DOGE) price continues to decline after hitting a five-month low of $0.065 on March 10.
According to blockchain forensics platform IntoTheBlock, Dogecoin miners increased their reserves by about 360 million coins in March 2023. The chart below shows that miners’ reserves grew from 4.4 billion coins on March 1 to 4.76 billion as of March 30.
In exchange for validating transactions and running the nodes that secure the network, miners are rewarded with the network’s native cryptocurrency. Miners accumulate reserves for a variety of reasons, including declining mining costs and the expectation of future price gains.
At current prices, Dogecoin miners are sitting on $357 million worth of DOGE. This is approximately 3.5% of the market capitalization of DOGE.
Holding such a significant portion of DOGE means that miners can significantly influence the imminent price action. Therefore, if the current accumulation trend among miners continues, DOGE holders can expect more gains in the coming weeks.
Importantly, another on-chain metric that validates the bullish outlook is the recent increase in large transactions involving Dogecoin.
On-chain data from analytics platform IntoTheBlock shows that the number of large Dogecoin transactions has declined since the most recent downtrend on March 4.
Dogecoin whales made 587 transactions worth over $100,000 on March 4th. As of March 30, the number of large transactions on the network has increased to 1,006, representing a 71% increase.
Since dropping to 587 as recently as March 4, Dogecoin whales have consistently surpassed 800 daily transactions. The number of large transactions involving a cryptocurrency is often positively correlated with its price. Therefore, if this steady increase in crypto whale activity continues, DOGE may soon experience a price increase.
DOGE Price Prediction: $0.90 Attainable
According to IntoTheBlock, order books from top exchanges show that buy orders for DOGE currently outnumber sell orders. This suggests that additional buy orders from bullish traders could trigger an increase in the price in the coming weeks.
As shown below, DOGE may face minimal resistance until it reaches $0.077. Around that area, a selling wall of 57.16 million DOGE could hamper the rally. But if DOGE scales that zone, it could move up to $0.095, where 130 million DOGE coins are up for sale.
Nevertheless, if DOGE loses the support at $0.066, where there are open buy orders for 56 million DOGE, the bears could force a decline. If the support at $0.066 does not hold, DOGE could drop further to $0.056, where another buying wall of 118 million DOGE could provide support.
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, unbiased reporting, but market conditions are subject to change without notice. Always do your research and seek professional advice before making any financial decisions.