Dogecoin has retraced 24% since rejecting $0.010 in early February. A closer look at the on-chain data shows that DOGE is flashing bullish signals. Could the recent accumulation trend among Dogecoin miners propel DOGE into another prolonged rally?
DOGE is flying under the radar despite the recent price bounce.
Dogecoin Miners are Positioning for Future Gains
Dogecoin (DOGE) has continued its price rebound since it hit a five-month low of $0.065 on March 10. On-chain data reveals that the uptick in reserves held by Dogecoin miners could be a major driving factor behind the recent price rally.
According to the blockchain forensics platform IntoTheBlock, Dogecoin Miners increased their reserves by nearly 360 million coins in March 2023. The chart below shows that the miners’ reserves increased from 4.4 billion coins on March 1 to 4.76 billion as of March 30.
Miners are rewarded with the native cryptocurrency of a network in return for running nodes that validate transactions and secure the network. Miners accumulate reserves for various reasons, including declining mining costs and 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 DOGE market capitalization.
Holding such a significant share of DOGE means that the miners can considerably influence impending price action. Hence, if the current accumulation trend among the miners continues, DOGE holders can expect more gains in the coming weeks.
Crucially, another on-chain metric that validates the bullish outlook is the recent uptick in large transactions involving Dogecoin.
On-chain data from the analytics platform IntoTheBlock shows the number of Dogecoin large transactions has rebounded since the recent downtrend on March 4.
Dogecoin whales performed 587 transactions worth more than $100,000 on March 4. As of March 30, the number of large transactions on the network had increased to 1,006, representing a 71% increase.
Since its recent drop-off to 587 on March 4, Dogecoin whales have consistently exceeded 800 daily transactions. The number of large transactions involving a cryptocurrency is often positively correlated to its price. Hence, if this persistent growth in crypto whale activity continues, DOGE could soon experience a price surge.
DOGE Price Prediction: $0.90 is Attainable
The order books of top exchanges show that buy orders for DOGE currently exceed sell orders, according to IntoTheBlock. This suggests the excess buy orders from bullish traders will likely trigger a price increase in the coming weeks.
As shown below, DOGE will likely face minimal resistance until it reaches $0.077. Around that zone, a sell wall of 57.16 million DOGE could impede the rally. But if DOGE scales that zone, it could rise further until $0.095, where another 130 million DOGE coins are up for sale.
Still, the bears could force a downswing if DOGE loses the $0.066 support where buy orders for 56 million DOGE are open. If the support at $0.066 does not hold, DOGE could slip further downward to $0.056, where another buy wall of 118 million DOGE can offer support.
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