On Friday morning, Dogecoin price reached $0.09. Analysis of key on-chain metrics allows us to understand how the actions of whales and retail investors will affect the dynamics of DOGE.
On November 17, DOGE attracted unusually high demand in both the spot and futures markets. Let's figure out what to expect from memcoin in the coming days.
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Crypto whales invested $230 million in DOGE
On November 3, we reported that the price of Dogecoin often rises after the annual DOGE Day celebration. Less than two weeks have passed since the price of the token began another rally from $0.067 to $0.09.
On-chain data shows that a group of whales with balances ranging from 10 million to 1 billion coins played a key role in this rally. As shown in the Santiment chart below, they purchased another 2.75 billion DOGE between November 2 and November 17. At the current price of $0.09, the value of the tokens purchased by whales is about $230 million.
Source: Santiment
An increase in interest from large investors in an asset usually has a positive impact on the price of the asset. If ordinary market participants follow the example of whales and switch to active purchases, the Dogecoin rally may continue.
Dogecoin attracts more and more new users
The rise in new user transactions appears to be another important factor driving Dogecoin's price up.
Dogecoin's new user ratio hit a 4-month high of 58.16 this month, according to IntoTheBlock.
Source: IntoTheBlock
This indicates that, despite the price increase, DOGE is still of interest to market participants.
Futures open interest soars 30%
Against the backdrop of positive Dogecoin price dynamics in the spot market, recent changes in the derivatives market are sending red signals. DOGE open interest has jumped about 30% in the past 24 hours, according to tracker Coinglass.
As shown in the chart below, between November 16 and November 17, the figure rose from $366 million to a 4-month peak of $474 million.
Source: Coinglass
Typically, an increase in open interest is considered a bullish signal, indicating that more investors are entering the market. However, an increase in the indicator by 30% during the rally indicates more risky behavior of traders.
Historically, this phenomenon often marked local price maximums. If the situation repeats, the DOGE price may enter a correction phase in the coming days.
DOGE Price Forecast: Important Resistance at $0.10
Increasing whale trading activity and increased demand from new users may further increase the price of DOGE. However, for the momentum to develop, Dogecoin will have to overcome the resistance of 725,320 addresses that purchased 17.97 billion tokens at an average price of $0.10. If the bulls can handle it, memcoin could continue its rally towards $0.20.
Source: IntoTheBlock
The bears, in turn, will try to provoke a fall in DOGE to $0.06. The 405,850 addresses that purchased 42.20 billion tokens at the maximum price of $0.071 will provide some support to the asset. However, given the risky behavior of futures traders, a reversal towards $0.07 could trigger massive liquidation and lead to a deeper correction.
