Despite the recent growth observed in other meme coins, Dogecoin (DOGE) is witnessing a decline in its price. The meme coin is encountering significant selling pressure from its large holders, commonly known as whales, coupled with minimal investor engagement, posing challenges for DOGE's performance.
Notably, Dogecoin's price trajectory has failed to manifest a potential bullish scenario, signaling a potential continuation of its downward trend. The decision of whale addresses to offload their holdings in an attempt to secure profits and mitigate losses is contributing to this decline.
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Source: Santiment
In the past week alone, addresses holding between 10 million and 100 million DOGE have collectively sold over 300 million coins, amounting to nearly $50 million, thereby reducing their total holdings to 17.36 billion DOGE.
Retail Investors Show Little Interest in DOGE Amid Low Activity
Apart from the selling pressure from whales, retail investors are showing minimal interest in the asset, as evidenced by their lack of participation. The active addresses ratio, which measures the proportion of active addresses to the total addresses holding any balance, provides insights into investor engagement on the network.
Source: IntoTheBlock
Currently, this ratio stands at less than 1%, specifically at 0.89%. This indicates that a negligible percentage of investors holding DOGE are actively conducting transactions on the network. The low participation underscores investors' hesitancy regarding potential profits and their anticipation of losses, resulting in subdued activity.
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Will Dogecoin Bounce Back After Recent Setback?
Dogecoin recently experienced a setback as it failed to sustain the ascending triangle pattern, a bullish continuation formation that implied a potential 22% upswing with a target price around $0.190. However, DOGE began declining even before reaching the $0.190 mark. Currently, the meme coin is trading at $0.159, managing to hold above the crucial support level of $0.151.
Source: BeInCrypto on TradingView
While this indicates some resilience in DOGE's price, the prevailing bearish sentiment across the broader market could pose challenges to its sustainability. In such a scenario, there's a possibility that DOGE might descend to $0.142 or even lower.
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However, a successful bounce-off from the support level and a reclaiming of $0.168 as support could pave the way for a rise to $0.182. If DOGE manages to breach this resistance level, it would invalidate the bearish scenario, potentially propelling it towards $0.190 and beyond.
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