- Whale transactions for Dogecoin have decreased recently, which could signal a potential decline in price.
- Dogecoin’s open interest has surged to its highest level since June 2020.
Dogecoin (DOGE), the largest meme coin by market capitalization, has noted a slowdown in whale transactions in terms of volume and count over the past two days. According to IntoTheBlock on-chain data, large wallet investors may have decreased their activity, which could affect the DOGE price in the future.
Whale transactions are large transactions made by investors who own large quantities of the cryptocurrency and are used to control the price movement of an asset. Whale activity is known to rise when prices are high owing to demand, and low whale activity may indicate a price decline.
As for Dogecoin, the decline in whale transactions may indicate a loss of interest among the trading community or lower activity in the meme coin sector. According to data from IntoTheBlock, the volume and count have gone up only to decline in the number of large transactions. This pattern is generally regarded as a precursor to possible price corrections, as fewer large transactions may indicate reduced buying pressure from whales.
Dogecoin Defies Whale Inactivity and Surges
But even with the decrease in the Whales’ activity, Dogecoin (DOGE) kept growing on Friday, thus increasing by over 16% since the beginning of the week. Several on-chain data also suggest that the rally could continue.
According to the data provided by Coinglass, Dogecoin’s open interest has increased in the last few days. As of Friday, the OI reached $889.53 million, which is the highest level since June 8, 2020. This increase in OI demonstrates a massive accumulation of capital by investors in the Dogecoin futures contract, which basically means a bullish market. An uptrend in the open interest tends to depict a new buying concept as more money flow into the market.
Another factor supporting the bullish outlook for Dogecoin is the long-to-short ratio on the asset, which is published by Coinglass. At the moment, the ratio is 1.06, meaning more traders are going long with the hope that the price of DOGE will go up. This is the highest long-to-short ratio in a month, giving a positive sentiment to the market.
Also, DOGE’s daily trading volume has increased significantly in recent times. According to data from Santiment, DOGE’s daily trading volume increased from $573.27 million on Sunday to $2.27 billion on Wednesday. This marked-up surge is the highest recorded since August, and it has added a positive spin to the short-term outlook of the coin.
Technical Analysis Shows Bullish Pattern for Dogecoin
A recent breakdown by market observer Dima James Potts shows that the current price pattern resembles the first few weeks of the Dogecoin rally in early 2021, which helped the asset reach an all-time high of $0.7316.
The technical aspect reveals that the prices of Dogecoin have violated the falling wedge formation, which is bullish. Despite a brief test of the upper trend line in early October, Dogecoin is back on the up again. The current pattern of the stock market resembles the one observed in early 2021, which led to a massive rally, so people are expecting another one.
