The Dogecoin price surged above $0.10 to reach a 4-month high. However, fundamental on-chain metrics flash red signals as miners begin to book profits. With social reactions nearing euphoric levels, is DOGE due for a price correction?
On April 3, Elon Musk ruffled feathers in the crypto community as Twitter embedded the Dogecoin logo on its homepage. The move saw DOGE rapidly surge 24% within 24 hours of euphoric trading. On-chain data signal impending correction as the news begins to sink in and markets approach saturation levels.
Dogecoin Miners Are Booking Profits
Dogecoin miners appear to be taking advantage of the recent price surge to book some profits. In the past week, the miners have offloaded 130 million reserve coins worth approximately $11.8 million, according to data compiled by IntoTheblock.
The chart below shows how the Dogecoin miners’ reserves reduced from 4.76 billion to 4.63 billion DOGE between March 28 and April 5.
When miners begin to sell off their block rewards, the supply of coins on the market increases. With Dogecoin miners holding nearly 3.3% of the total DOGE supply, their sell pressure can significantly impact the price.
Similarly, on-chain data from Santiment shows that the global Dogecoin community is currently in euphoria. Social Volume is an on-chain metric that measures the total number of times a project is mentioned across relevant media channels.
The chart below shows how Dogecoin’s Social Volume spiked from 4,244 to 17,248 between April 2 and April 5.
Historical price data shows that Dogecoin has often retraced when daily social media mentions have exceeded 13,000. Tellingly, DOGE social mentions crossed 17,000 following Elonmusk’s recent Twitter stunt.
Summarily, the sell-off among miners and the spike in the social media frenzy can be interpreted as signals for impending price retracement.
DOGE Price Prediction: Will the $0.088 Support Hold?
The price distribution of aggregate buy/sell limit orders currently placed on exchanges indicates that DOGE is likely to retest $0.076.
IntoTheBlock’s Exchange-Market depth chart depicts that 50 million DOGE buy orders placed by exchange traders can initially help the meme coin stay above $0.088. But if DOGE loses this support, it could slide toward $0.076, where a much larger buy-wall of 167 million coins can help keep the bears at bay.
Still, the bulls can gain ground if DOGE can rally above $0.11. But it would have to absorb the sell-pressure of about 100 million coins to achieve this. If that happens, DOGE could proceed on a tear toward $0.12, where the bears have placed orders to sell another 157 million coins.
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