From November 20 to 23, Dogecoin (DOGE) whales reduced their holdings - during the same week, the cryptocurrency reached an annual high. The reduction in risk exposure caused the price of DOGE to fall to $0.36.
However, the situation is no longer the same, as these major stakeholders have resumed buying. Here’s how this will affect Dogecoin's future value.
A major sell-off won't make Dogecoin just walk away without buying.
According to data from Santiment, the balance of addresses holding between 1 million and 10 million DOGE fell to 10.39 billion on November 23, but has since risen to 10.59 billion.
This indicates that Dogecoin whales took the opportunity during the weekend dip to accumulate approximately 200 million Dogecoins. At DOGE's current price of $0.42, this amounts to a purchase worth $84 million. Such accumulation by whales typically indicates a reduction in selling pressure.
Therefore, the significant increase in buying activity suggests that the price of Dogecoin may break through the current level of $0.42. If that happens, the meme coin's prediction of reaching $1 may become a reality.
Furthermore, the Average Directional Index (ADX) has been steadily rising. ADX is a technical analysis tool that helps traders assess the strength of a trend, whether bullish or bearish.
When the ADX exceeds 25, it indicates strong directional momentum. Conversely, a reading below 25 indicates weak trends. On Dogecoin's daily chart, the ADX has surged to 68.00, indicating a significant upward trend. As the token rises, this suggests that the price of DOGE may continue to increase.
DOGE Price Prediction: $1 is still feasible.
Further examination of the daily chart shows that the price of Dogecoin encounters resistance at $0.43. This decline is one of the reasons the cryptocurrency failed to rebound to $0.50. It is also worth mentioning that the drop in trading volume makes it difficult for the upward trend to sustain.
Meanwhile, bulls seem to be defending the $0.36 region. If this continues, then the value of DOGE may climb to $0.48. In a highly bullish scenario, the meme token could rebound to the $1 mark.
However, if DOGE whales decide to sell, this may not happen. Instead, the token could drop to $0.32.