According to U.Today, whale activity is currently the primary factor behind a significant increase in selling pressure for Dogecoin. On July 23, the short-term moving average crossed below the long-term moving average, a pattern often seen as a bearish signal. This event, known as a death cross, was followed by a sudden sell-off. On-chain metrics indicate that bid and ask volumes are imbalanced, favoring sellers. The price decline has been accompanied by a noticeable rise in transaction volumes, peaking on July 20, 2024, with 1,032 transactions over a seven-day period. This increased activity aligns with whale accounts exerting more pressure to sell. In the last 24 hours, 5.73 billion DOGE has been moved, highlighting the current market state.
Despite the short-term pessimistic outlook suggested by these metrics, the broader on-chain picture implies that Dogecoin might be nearing a reversal point. Historically, strong selling pressure, especially from whales, often marks the beginning of a market bottom and a potential recovery. The relative strength index (RSI) on the Dogecoin chart is around the 50 level, indicating that the asset is neither overbought nor oversold. If buyers step in, this could signal an imminent trend reversal. The moving averages also present mixed signals. The asset's ability to stay above critical support levels, such as the 100 EMA, and recent price action showing resilience above $0.125, could indicate underlying strength despite the bearish trend suggested by the death cross.
Dogecoin's market sentiment often defies conventional technical analysis due to its large and active community, leading to unexpected rallies. The current situation underscores the importance of monitoring whale activity and on-chain metrics to understand potential market movements.
