Dogecoin saw a 3% dip in value after whales offloaded 119.67 million DOGE worth $11.70 million.
Whale on-chain activity dropped significantly, with inflows decreasing from 229.49 million to 27.96 million DOGE per day in September.
Dogecoin's futures open interest fell by 3.5%, and its RSI is at 40, indicating downside pressure on the asset.
Recently, Elon Musk made hints about accepting Dogecoin (DOGE) as payment for Tesla products. Positive sentiment was generated in the larger cryptocurrency market by this announcement. For a brief period, investors expected DOGE's value to rise.
However, this optimism soon dissipated as large investors also referred to as whales started cutting back on their holdings. Concerns regarding Dogecoin's future have been expressed by market participants due to the abrupt change in whale activity.
https://twitter.com/whale_alert/status/1831070491022356580 Significant Whale Activity Raises Concerns
On September 4, Whale Alert disclosed that 119.67 million DOGE, or $11.70 million, had been moved from an unidentified wallet to Robinhood. This large money transfer indicates a significant decline in whale confidence.
Notably, their choice to sell off such a substantial quantity of Dogecoin has raised concerns about a possible decline in the token's value. In addition, additional research from IntoTheBlock revealed a discernible drop in on-chain activity among whales that owned at least 0.1% of the total amount of Dogecoin in circulation.
Furthermore, while outflows have increased by 80.7% since the beginning of September, inflows have decreased significantly from 229.49 million DOGE to just 27.96 million DOGE per day. This pattern implies that big investors are pulling back, which could be interpreted as a lack of confidence in the asset's near-term prospects.
Dogecoin’s Market Performance Remains Sluggish
Despite Musk’s recent endorsement of Dogecoin, the cryptocurrency has not taken off. On the day of the whale sell-off, the token's value dropped by 3%, ending at $0.0963. This drop happened despite more positive overall market trends.
In addition, Dogecoin has seen a decline in value over the previous week and dull price action. The market's perceptions of Dogecoin's future are unclear as a result of this poor performance and declining whale confidence.
Notably, the open interest (OI) for the token's futures saw a 3.5% decline as well, coming down to $446.31 million. This decline in OI is indicative of traders being cautious, which adds to the pessimistic outlook.
Market Sentiment and Future Outlook
Additionally, Dogecoin's relative strength index (RSI) was 40, suggesting that the asset is under pressure to decline. The token has not profited from these developments, even with the good news about Tesla and the dismissal of a Dogecoin manipulation case against Musk. Reduced whale activity, slow price movement, and cautious market sentiment all point to potential difficulties for Dogecoin in the near future.
Even though the market is still extremely volatile, the current patterns suggest that Dogecoin's price action is likely to be bearish. Both traders and investors will be closely observing the token's movements for any indications of a possible rebound.
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