Dogecoin price is at risk: miner reserves have fallen to a historical low of 4.35 billion DOGE
Dogecoin (DOGE) is still trading around the $0.06 mark as bulls failed to take advantage of the cryptocurrency market's brief rebound in late September.
Using on-chain data, we understand how bearish sentiment among miners can affect the price of memcoin.
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Dogecoin miner reserves fall to historic lows
Dogecoin has been consolidating in the range of $0.06-$0.063 since mid-August. On-chain data shows that the stagnation in price may be caused by the actions of miners: as shown in the chart below, between August 17 and October 5, they got rid of 320 million coins and brought their holdings to an all-time low of 4.35 billion DOGE. At the current price of $0.06, the value of the tokens they sold is approximately $19.2 million. Source: IntoTheBlock
However, it is unclear whether other market participants will take any action to prevent the Dogecoin price from collapsing or join the sell-off.
Open interest on DOGE increased by almost $30 million
A significant influx of capital into Dogecoin derivatives markets could offset the negative impact of miners' actions.
As of September 21, open interest on DOGE was $205 million. By October 5, it gradually increased to $234 million.