Can Dogecoin Price Rally as Miners Accumulate 400M DOGE?
Dogecoin (DOGE) price bounced back above $0.075 on Thursday, but it’s still some distance away from regaining the monthly peak of $0.086. On-chain analysis pinpoints key indicators that could drive the DOGE price recovery mission.
DOGE price has experienced a series of lower lows since rejecting at the $0.086 area on November 18. However, recent on-chain movement from Dogecoin miners flashes early signals of a major recovery.
Miners Have Accumulated DOGE Worth $30M in the Last 2 Days
On November 18, Beincrypto reported how Dogecoin price retraced from its six-month peak of $0.086 after Elon Musk’s SpaceX lost a spacecraft.
The market turbulence that heralded Changpeng Zhao’s exit from Binance further exacerbated the downtrend, as DOGE price spiraled toward a week-low of $0.072 on Wednesday, November 2. However, on-chain data trends have revealed unusual activity among Dogecoin miners, which could trigger bullish price actions.
According to on-chain data compiled by IntoTheBlock, Dogecoin miners have increased their cumulative reserves by a whopping 400 million DOGE within the last two days.
The miner reserves chart below clearly illustrates how the Dogecoin network validators increased their holdings from 4.17 billion to 4.57 DOGE between November 20 and November 22.
When valued at the current Dogecoin price of $0.075, the newly-acquired 400 million coins are worth approximately $30 million. Investors often interpret it as a bullish signal when miners accumulate their block rewards during volatile market conditions. It clearly indicates that the miners are looking to hold out for future gains rather than sell at the current prices.
If strategic investors buy into the miner’s bullish disposition, the DOGE price rally could get back on track in the days ahead.
Media Hype Surrounding DOGE Has Cooled
Furthermore, as DOGE prices dipped this week, crypto traders appear to have switched focus to other top-charting mega-cap assets like Bitcoin (BTC), Ethereum (ETH), and Uniswap (UNI). In effect, the media hype surrounding Dogecoin has reduced significantly.
In confirmation of this stance, Santiment’s chart illustrates that since rejecting at $0.086 last weekend, Dogecoin’s social volume has dropped from 448 to 112 at press time on November 23.
Social volume measures the number of mentions that a cryptocurrency attracts across relevant crypto media channels. This decline in Social Volume could be crucial to DOGE price action, for a number of reasons.
Firstly, a decline in social hype often indicates that the market has reached a local bottom. Strategic swing traders looking to buy at the bottom could consider this perfect timing to re-enter the DOGE market. Secondly, when an asset has minimal media hype, prospective investors often see the current prices at a fair market value of the coin.
Hence, if investors consider the current decline in Dogecoin media mentions as a signal to enter the market, DOGE price could be on the verge of a major bullish reversal.
Read More: Everything You Need To Know About Bull Flag Patterns
DOGE Price Prediction: Can the Rally Reach $0.10?
From an on-chain perspective, the miner’s accumulation and increased demand from new users could further propel the DOGE rally. However, to seize the momentum, the bulls must first scale the initial $.080 resistance.
The Global In/Out of the Money (GIOM) data, which groups the current DOGE holders according to their entry prices. This also confirms this prediction.
It shows that 762,860 addresses had bought 19.6 billion DOGE at the minimum price of $0.80. If those investors exit early, they could trigger an instant Dogecoin price correction. However, scaling that initial sell-wall could open the door to reclaiming $0.10.
Still, the bears could invalidate that positive prediction if the Dogecoin price wobbles below $0.06. But, in that case, the 457,560 addresses that bought 30.8 billion DOGE at the average price of $0.067 could offer initial support. If those investors HODL firmly, they will likely avert a major Dogecoin price reversal.
But if they sell early, Dogecoin’s price could drop to $0.06.
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