This is why DOGE traders could be distressed this memecoin season
- Dogecoin could be considered in limbo as sell pressure dies down while the bulls remain on the sidelines.
- DOGE’s price action was also underpinned by retail accumulation and low demand from whales.
Investors that purchased Dogecoin [DOGE] hoping to take advantage of this year’s memecoin craze are nursing losses after it failed to deliver. Let’s explore some potential reasons why and whether this may affect its long-term outlook.
The world just celebrated Mother’s Day and while this may not necessarily have a direct link to Bitcoin [BTC], it is it has some historic significance. In 2021, Elon Musk performed at SNL where he and his mother made some jokes about DOGE including gifting it as a Mother’s day gift. A bearish outcome was ensured shortly after that event.
When Elon Musk gifted his mother, a Dogecoin on Mother’s Day 💛 @mayemusk
— DogeDesigner (@cb_doge) May 13, 2023
The SNL episode was among the events that happened right before crypto winter. There was some hope among DOGE holders that the latest memecoin season would trigger a sizable rally. As a result, there was significant accumulation in the last few days especially by retail traders. DOGE also failed to secure a place in the memecoin craze despite being one of the pioneers in the segment.
Dogecoin’s supply distribution revealed that addresses holding smaller amounts of the cryptocurrency have been accumulating since the start of May. However, it also indicated that there was noteworthy sell pressure from some of the largest whales.
For example, addresses holding between 100 million and 1 billion DOGE have been trimming their balances since the start of May. This category of whales represented 19% of the circulating supply and was the second-largest whale category.
Source: Santiment
Dogecoin price action
Although some whales have been contributing to selling pressure, it was worth noting that the same whales started re-accumulating in the last three days. As a result, sell pressure subsided and the price leveled out. Dogecoin traded at $0.072 at press time, with signs of a potential pivot.
Source: TradingView
While current observations suggested that a potential pivot was in the works, it is worth noting that Dogecoin still wasn’t oversold. The bears might still resume control especially now that the level of buying pressure was still low. In other words, it is still too early to tell whether the bulls or bears will win the next round.
On-chain volumes remained low despite the recent accumulation. This was perhaps a reflection of the current state of uncertainty. We saw a surge in the number of daily active addresses in the last seven days, but that may just have been retail buyers. Hence, this could be the reason behind DOGE’s failed rally.
Dogecoin investors can anticipate a retest of the next support line near the $0.063 price level if a bullish attempt fails.
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