Dogecoin (DOGE) has seen a remarkable surge in demand, with traders anticipating a possible price rally that could push the cryptocurrency to new heights.
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A prominent crypto trader predicts a potential 200% increase in DOGE’s price.
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The current demand for DOGE exceeds selling pressure, suggesting a bullish price trajectory.
As of the latest reports, Dogecoin (DOGE) stands out as the leading performer among meme coins, boasting an impressive gain of over 230% in the fourth quarter of 2024.
According to cryptocurrency analyst 52K Skew, the momentum for Dogecoin could continue to rise. He utilized Fibonacci retracement levels to project that DOGE might aim for $1.16, representing a staggering 200% increase from the current value of $0.39.
Source: 52K Skew
Demand Dynamics: DOGE vs. Selling Pressure
Despite the bullish outlook, there exists a notable short-term challenge due to significant profit-taking and miners liquidating their holdings. Reports indicate that miners have sold over 20 million DOGE tokens, contributing to a substantial supply influx. Data from Santiment reveals a decline in the amount of DOGE held by miners, dropping from 2.13 billion to 2.11 billion, indicating the selling pressure present in the market.
Source: Santiment
Notably, this miners’ sell-off appears to be counteracted by a surge in demand from larger market participants. Whale investors have purchased over 150 million DOGE tokens in the past week, corresponding to a sevenfold increase in demand relative to the selling pressure from miners. Furthermore, miners continue to hold a significant portion of DOGE, with more than 2 billion tokens still in their wallets, suggesting an underlying confidence in further price increases.
In addition to demand from whales, the active wallet count reached a yearly high of over one million active addresses over the weekend, reflecting heightened interest among retail investors in Dogecoin.
Source: Santiment
With retail traders reporting a drop of over 24,000 in non-empty wallets within just one day, Santiment also noted that this could indicate intensified profit-taking behavior. Interestingly, the data can be viewed as a potential bullish signal for DOGE, as such declines in wallet counts often suggest capitulation of novice investors, potentially paving the way for increased accumulation by seasoned players.
“When a network’s overall amount of wallets declines, it is a sign of FUD & capitulation from novice traders that is often a bullish indicator for the coin’s price (since those liquidated coins are likely being bought by larger whales & sharks who are hodling for the long-term),” noted Santiment.
Conclusively, while profit-taking currently weighs on DOGE, its price remains anchored above critical support levels. This suggests that there may still be significant potential for upward movement despite ongoing selling pressure.
Conclusion
In conclusion, Dogecoin finds itself at a pivotal point, with demand dynamics indicating a possible bullish reversal amidst current profit-taking trends. The analysis suggests a strong potential for price appreciation if the overall market sentiment remains favorable, providing traders and investors with a compelling outlook for the future of this iconic meme coin.
