Recently, with Musk’s tweets and the surge in social sentiment, Dogecoin is expected to receive more attention this weekend.
A surge in social activity could help DOGE’s price action
Ownership statistics also highlight some growth
Dogecoin had a strong start to the first quarter of 2024 but has since given back nearly all of its year-to-date gains. This is despite the fact that the year’s movement has favored the memecoin sector. In fact, the latest data suggests that social sentiment is starting to support the king of memecoins.
According to LunarCrush, social activity around Dogecoin has been increasing. Analysis shows that Dogecoin’s social metrics are on par with major currencies such as Bitcoin, Ethereum, and Solana. This means that Dogecoin supporters may be trying to gain support for the memecoin.
The rise in Dogecoin’s social indicators is timely, especially considering that the cryptocurrency has retreated from its year-to-date highs. For example, at press time, its price of $0.097 is 57.25% lower than its 2024 peak. Moreover, it has been trapped in a wedge pattern and is now also approaching the pattern breakout zone.
The combination of price levels and high social sentiment suggests that Dogecoin could benefit from liquidity inflows. However, this does not necessarily guarantee a rebound. In fact, if confidence weakens further, there is still a chance that prices will continue to fall.
Assessing Dogecoin’s bullish sentiment and holdings
On-chain assessments show a large amount of short positions in the current price range. As the price slides from the weekly resistance near $0.099, short positions have exceeded 2 million in the past 24 hours.
However, despite the presence of shorts, net long positions have increased at the same level. The number of net longs peaked at $4.16 million at the same level of $0.099. This confirms that the recent price lows have attracted more bullish confidence.
Still, the presence of bears highlights the possibility of falling prices.
DOGE has seen a significant price drop over the past few months, which may have attracted more investors to the market. Additionally, Dogecoin ownership statistics confirm that ownership activity has surged over the past 4 weeks.
For example, on August 5, whales held 64.47 billion DOGE (41.49%). A month later, the DOGE supply held by whales rose to 65.39 billion (41.73%).
Retail investors are also increasing their holdings. For example, they held 58.44 billion DOGE (37.7%) on August 5. Since then, their holdings have increased to 59.24 billion (37.8%).
On the contrary, the investor class (institutions) significantly reduced their holdings. On August 5, investors held 32.51 billion DOGE coins, which fell to 32.08 billion a month later.
These ownership statistics confirm that Dogecoin whales and retail investors have been accumulating, albeit at a low rate. It will be interesting to see how improving social sentiment affects demand for Dogecoin in the days and weeks ahead.