About a week ago, the price of Dogecoin (DOGE) reached $0.43, but since then it has decreased to $0.37. Despite the decline, it seems that Dogecoin holders are not inclined to sell, indicating higher confidence in the meme coin's potential.
This sentiment may imply that the price of DOGE is ready for the next upward leg. This is why.
Dogecoin investors stick to HODLing rather than taking profits
It has been seven days since the price of Dogecoin reached its annual high. Although it has decreased since then, data from IntoTheBlock shows that the holding time of coins has increased by over 100%.
The Coin Holding Time metrics measure the time cryptocurrencies are held without being traded or sold, providing insights into investor behavior. When it decreases, it means holders are selling and the price may drop.
However, since the holding time has increased, most Dogecoin holders have restricted their trading of the coin. This is often a bullish sign and if this remains unchanged, the value of the cryptocurrency could continue to rise.
Dogecoin Holding Time. Source: IntoTheBlock
Additionally, on-chain data from Santiment shows a significant decrease in the circulation of Dogecoin. Circulation indicates the number of coins participating in transactions over a certain period.
In most cases, when this metric rises, it means that selling pressure is likely to increase. However, for DOGE, the issuance has decreased from 5.88 billion to 969.06 million as of the time of writing this article.
Like Coin Holding Time, decreasing circulation is a bullish sign, indicating increasing buying pressure. If this decrease continues, the price of DOGE could bounce back above $0.37.
Dogecoin Circulation. Source: Santiment
DOGE Price Prediction: High Resilience
Once again, Dogecoin has formed a bullish flag on the 4-hour chart. The last time this happened, the price of DOGE increased by over 100%.
A bullish flag is a continuation pattern signaling the potential continuation of an upward trend after a pullback or short accumulation. When the price breaks the pattern, it usually continues its upward trajectory.
Dogecoin analysis 4 hours. Source: TradingView
Considering this outlook, the price of Dogecoin could likely climb above $0.50 in the short term. However, if Dogecoin holders start selling, this may not happen. In that case, the meme coin could drop below $0.30.