The price of Dogecoin (DOGE) surged by 20% within the week, reclaiming the $0.068 mark on Tuesday. Analyzing on-chain data reveals the impact of increased whale demand on this recent DOGE price surge.
After hitting a yearly low of $0.057 on October 14, Dogecoin fell behind Solana, but whale investors stepped in to prevent significant losses. The question now is whether these whales have the potential to drive DOGE's ongoing price recovery even higher.
Dogecoin Whales' Trading Activity Hits a 3-Month Peak
Between October 14 and October 23, Dogecoin experienced a remarkable 20% recovery in price, with on-chain data indicating a resurgence in interest from whales, the largest holders of this meme-based cryptocurrency.
As illustrated below, when DOGE's price hit its yearly low, there were only 599 Whale Transactions on October 15.
However, since then, whales have been active in preventing further losses. On October 24, there were 1,420 whale transactions, the highest since July 25.
The Whale Transaction metric tracks the total number of daily transactions exceeding the $100,000 mark. An increase in whale transactions is seen as a bullish signal for several reasons.
Firstly, it signals a heightened buying interest from whale investors, which in turn boosts the confidence of retail investors. More importantly, the liquidity provided by these large transactions enables traders to execute trades more efficiently and at favorable prices.
Unsurprisingly, this surge in whale activity coincided with a 20% price recovery for Dogecoin during that period. However, it remains uncertain whether the whales will consolidate their positions or continue pushing aggressively for further gains.
Mounting Buying Orders Suggest Bulls Still Control the Market
With Dogecoin now trading at a 60-day high, a critical on-chain indicator suggests that holders may push for even more gains.
The latest data from the Aggregate Order Books of 10 crypto exchanges, including Binance and Coinbase, indicates that despite the current high prices, DOGE still faces strong market demand.
As shown below, traders have placed active orders to buy 782 million DOGE coins, while there are only active sell orders for 740 million DOGE.
The Aggregate order books chart displays the current price distribution of active buy/sell orders placed by traders for a specific cryptocurrency asset.
As demonstrated, the current demand for DOGE exceeds the available supply by more than 38 million coins. When demand surpasses supply, sellers may need to raise prices as they compete to fulfill their orders.
In summary, the increase in whale activity and market demand for Dogecoin are crucial indicators pointing towards potential price gains in the coming weeks.
DOGE Price Prediction: Road to $0.08?
With the bulls firmly in control, Dogecoin's price may be on the verge of rallying towards $0.08.
The Global In/Out of the Money data, which represents historical buying trends among Dogecoin holders, also supports this idea. However, it indicates that the bulls might face significant resistance around the $0.075 mark.
As shown below, 568,920 addresses have bought 59.6 billion DOGE at an average price of $0.075. If these holders decide to take profits, it could trigger a bearish reversal.
But if bullish whales continue to accumulate Dogecoin, the price could indeed reach $0.08, as predicted.
On the downside, if Dogecoin's price falls below $0.050, the bears could take control. However, as observed last week, the bulls are likely to establish strong support around $0.060.
The chart above reveals that 491,950 addresses currently hold 5.77 billion DOGE purchased at a maximum price of $0.60. If they hold onto their positions (HODL), they could prevent a reversal in Dogecoin's price.
Nevertheless, if this support level breaks, it may lead to a substantial price decline below $0.05.
