Dogecoin (DOGE) price remains rooted at the $0.06 range as the bulls failed to capitalize on the brief crypto market bounce in late September. On-chain data analysis examines how the recent bearish disposition among Dogecoin miners could put DOGE prices at risk.
Dogecoin miners have been spotted making unprecedented withdrawals, condemning the pioneer memecoin to a 30-day consolidation at the $0.06 range. Can bullish speculative traders prevent the DOGE price from sinking to historic lows?
Dogecoin Miners Reserves Drop All-Time Low
Dogecoin price has conspicuously remained stuck in the $0.06 – $0.063 range since mid-August. The consolidation has persisted despite waves of bullish headwinds, albeit sporadic, in the broader crypto markets.
Vital on-chain data trends now reveal that Dogecoin miners offloading their reserves could be behind the price stagnation. As depicted below, the miners held a total of 4.67 billion DOGE as of August 17. But that figure has gradually reduced since then, hitting 4.35 billion DOGE on October 5.
This implies that Dogecoin miners have sold 320 million coins from their cumulative reserves between August 17 and October 5.
Miners Reserves tracks the current deposit balances in wallets controlled by recognized large-scale Dogecoin miners and mining pools.
When valued at the current market price of $0.06, the 320 million DOGE sale means the miners have withdrawn approximately $19.2 million between August 17 and October 5.
Typically, such a large decline in miners’ reserves means that the node validators are liquidating a significant chunk of their block rewards. When newly minted coins continue to increase market supply, it puts downward pressure on price.
And evidently, the Dogecoin miners’ selling frenzy has contributed significantly to the DOGE price stagnation observed since August 18.
However, it remains to be seen if other key stakeholders and market participants will swing into action to prevent a Dogecoin price breakdown.
Speculative Traders Have Depolyed $28 Million in Fresh Capital Inflows
In a move that could neutralize the bearish impact of the miners’ historic sell-off, speculative traders have made significant capital inflows into Dogecoin derivatives markets.
Indicatively, the Dogecoin Open Interest stood at an aggregate of $205 million as of September 21. But remarkably, it has since gradually increased to $234 million at press time on October 5.
This implies that the Dogecoin speculative traders have made fresh capital inflows worth $29 million within the last two weeks.
Open Interest depicts the aggregate value of outstanding futures or options contracts for DOGE in the derivatives market. An increase in Open interest indicates increased investments and an improvement in market sentiment.
The $29 million inflows in the last two weeks may explain why the DOGE price has held the $0.06 support amid the miners’ intense selling pressure.
In summary, with Dogecoin miners’ reserves now at an all-time low, it logically follows that their influence on price action could begin to wane. Hence, if the speculative traders keep piling on fresh capital, DOGE could avoid a major price breakdown.
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DOGE Price Prediction: Further Consolidation at the $0.06 Range
The key indicators analyzed above point towards a prolonged DOGE price consolidation around the $0.06 level. The price action will likely remain neutral, with the Dogecoin miners and speculative traders taking opposing positions.
The Global In/Out of Money Around Price (GIOM) data, which depicts the entry price distribution of current DOGE holders, also validates this neutral stance.
It shows that the DOGE price is trending between two major support and resistance clusters.
As shown below, 410,000 addresses had bought 15.1 billion DOGE at the minimum price of $0.062. If the miners keep selling, they could prevent the price from breaking out.
Conversely, the bullish speculative traders could also prevent the bears from forcing a downswing below $0.055. As depicted above, 465,000 addresses had bought 6.45 billion DOGE coins at the maximum price of $0.060.
They will likely try frantically to cover their Longs to avoid historic losses. But if the Dogecoin price fails to hold steady at that vital support level, it could edge closer to $0.055.
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