Recent data has revealed that traders are shifting from major cryptocurrencies to memecoins like Dogecoin ($DOGE), which has been attracting significant interest of late.
With around 8.65 billion of $DOGE being moved by major investors, the memecoin has seen a notable rise in large transactions. This activity is occurring despite an 8% decline in Dogecoin’s value. The surge in large transactions might also be linked to the overall poor performance of the cryptocurrency market.
Dogecoin’s value trajectory has been largely upward over the past month, with strong trendline support at $0.156. Whale activity, usually marked by a high volume of transactions, saw a seven-day peak of 159,000 transactions and a low of 13,000.
This fluctuation reflected the erratic state of the market and the changing attitudes of major investors. The total transaction volume within the Dogecoin ecosystem also showed significant movement, with a seven-day high of 9.48 billion $DOGE and a low of 6.63 billion $DOGE.
Despite these fluctuations, the average balance data remained relatively stable, suggesting a balance between buying and selling activities among whales. The significant volume of 8.65 billion $DOGE moved by large investors over the previous day underscored this trend.
This whale activity spike typically denoted either large accumulation or large sell-offs. It seems that some large investors may be selling their holdings, which would contribute to the price’s downward pressure given the 8% drop.
A shift in focus
Since 23 May, Bitcoin’s price has been consolidating above $67,000. With the impending supply overhang from the Mt Gox exchange, some traders are shifting their focus to memecoins, particularly legacy memes like Dogecoin.
Singapore-based crypto-trading firm QCP Capital noted that traders are moving to higher beta meme tokens such as Shiba Inu ($SHIBA), $DOGE, and Pepe ($PEPE), which have seen double-digit gains and high open interest rates.
A spot check on Coinalyze showed that $PEPE and Floki ($FLOKI) recorded an upswing in open interest rates in the past 24 hours. However, Dogecoin’s OI was still negative at the time of writing, down about 5%, which could delay a strong short-term recovery for $DOGE.
Open Interest (OI) rates, which track opened futures contracts and the money flowing into or out of them, are a key indicator of market sentiment. A rising OI suggests bullish sentiment, while a declining OI indicates bearish sentiment.
DOGE’s OI has been trending lower since 27 May, sliding below $900 million. This decline indicates bearish sentiment on Dogecoin’s price prospects. The downsloping Cumulative Volume Delta (CVD) further demonstrated sellers’ market leverage from 27 May.
Dogecoin is also nearing a key short-term support at $0.15, with potential rebound targets at $0.17 or $0.20. However, a breach below $0.15 could push Dogecoin down to a multi-month support at $0.13.
Whale accumulation and market impact
Dogecoin’s price has underperformed compared to other meme coins like Shiba Inu, Pepe, and Floki in recent weeks.
Despite this, Dogecoin remains a significant player in the cryptocurrency market, with a fully diluted valuation of about $23 billion and a daily average traded volume of around $1 billion. The Dogecoin network boasts over 7.3 million holders and has facilitated over 334 million transactions.
Recently, Dogecoin whales have been on a buying spree, purchasing over 700 million $DOGE units worth approximately $112 million in the past three days. This increased activity has seen Dogecoin transactions involving at least $100,000 surge from $1.54 billion to about $3 billion in less than 24 hours.
The recent uptick in whale transactions has also triggered a spike in overall on-chain activity, with investors anticipating potential supportive actions from Elon Musk on the X platform.
The rise in whale transactions is a significant indicator of market dynamics. Despite the continued choppy markets, Dogecoin whales have accelerated their accumulation pace.
Addresses holding between 100 million and 1 billion $DOGE units now hold a total of about 30.9 billion units. This accumulation is happening in the context of Dogecoin’s underperformance compared to other meme coins and the overall volatile state of the cryptocurrency market.
Overall, the market for Dogecoin remains dynamic, with significant movements driven by whale transactions, shifting trader focus, and broader market trends. The next few weeks will be crucial in determining whether Dogecoin can break out of its current range and achieve new highs.
