Dogecoin (DOGE) has seen a remarkable recovery, posting a 20% gain in just one week, pushing its price back to the $0.068 territory. This resurgence in Dogecoin’s price has caught the attention of the crypto community, and on-chain data analysis provides insights into the role of whale investors in driving this rally.
On October 14, Dogecoin hit a yearly low of $0.057, falling behind other cryptocurrencies like Solana. However, during this critical period, it was the actions of whale investors that prevented historic losses for DOGE and set the stage for a potential recovery.
Whales Step In to Prevent Losses
Between October 14 and October 23, Dogecoin’s price made a remarkable recovery, and on-chain data suggests that renewed interest from whale investors played a significant role. On October 15, as Dogecoin was languishing at its yearly low, there were only 599 whale transactions.
However, since then, these large investors have stepped in to prevent further losses. On October 24, there were 1,420 whale transactions, marking the highest number since July 25.
Whale transactions, which involve trades exceeding $100,000, are viewed as bullish indicators for several reasons. Firstly, they signal increased buying interest from these influential investors, bolstering the confidence of retail traders. Additionally, the liquidity provided by these substantial transactions facilitates more efficient and favorable trading conditions.
This surge in whale activity had a direct impact on Dogecoin’s price, driving a 20% price recovery during this period. The question now is whether these whales will consolidate their positions or continue pushing for further gains.
Bulls Still in Control
As Dogecoin now trades at a 60-day price peak, a crucial on-chain indicator suggests that holders may continue to push for additional gains. Data from the aggregate order books of ten prominent crypto exchanges, including Binance and Coinbase, reveals that despite the current high prices, DOGE still enjoys excess market demand.
Active buy orders for 782 million DOGE coins outnumber active sell orders, which total 740 million DOGE. This situation highlights a current demand that exceeds supply by more than 38 million coins.
When demand surpasses supply, sellers may be compelled to increase prices as they compete to fill orders. This dynamic suggests the potential for further price increases in the coming weeks.
With the bulls firmly in control, Dogecoin’s price appears poised for a rally towards $0.08. Global In/Out of the Money data, reflecting historical buying trends among Dogecoin holders, supports this notion. However, it also indicates that significant resistance could be encountered around the $0.075 territory.
If those who bought at the $0.075 level decide to take profits, it could trigger a bearish reversal. But if the bullish whales continue to accumulate Dogecoin, the price could indeed reach the $0.08 mark as predicted.
On the downside, bears could take control if the price falls below $0.050. However, historical data shows that the bulls have been quite resilient in establishing strong support around the $0.060 mark.
While the crypto market is inherently volatile and subject to rapid shifts, the data suggests that Dogecoin’s recent rally is underpinned by strong fundamentals, including increased whale interest and healthy market demand, hinting at potential future gains for DOGE.