Doge price is at $0.3078 after a 12.53% dip in the last 24 hours. The decline is accompanied by a large whale transfer. 200 million DOGE, worth $59 million, were transferred to the Binance exchange, which might cause further selling pressure.
Dogecoin could continue to tumble lower according to crypto analysts. However, a bullish reversal could be seen in early next year.
Sharp DOGE Price Drop Linked to Whale Activity
Dogecoin’s price fell in sync with a significant whale transaction, which led to bearish market sentiment.
According to Whale Alert data, an investor transferred 200 million DOGE to Binance. And such transactions are usually followed by a sell-off.
These movements often weigh on the price given that large amounts of cryptocurrency are being dumped which can have a negative effect on market value.
The effects were seen almost immediately in the price movement. DOGE price dropped to an intraday low of $0.28, and then slightly rebounding to $0.31.
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This sell-off also follows broader market trends as Dogecoin has declined by more than 18% in the past 24 hours.
If the price drops to $0.26, there may be further decline to $0.10764. This is a long term support level according to market analysts.
Increased Trading Volume and Market Volatility
The trading volume for Dogecoin increased by 112.82% in the last 24 hours to $14.64 billion. This points to increased trading during the price decline.
The high trading volume combined with the significant DOGE price drop indicates that traders are liquidating their position.
Market sentiment is still bearish. The price is below the two moving averages, the 13-day and the 49-day moving averages.
The recent Golden Cross indicator which was earlier a positive indicator of bullish trend has been overshadowed by the current bearish trend.
Nonetheless, technical indicators such as the Relative Strength Index (RSI) put Dogecoin at 34.13. That is just close to the oversold zone, which may lead to a short-term rally or consolidation.
Will DOGE Price Dip Continue?
Dogecoin’s woes are indicative of the broader crypto market slump, including a sell-off that affected the cryptocurrency market.
Some of the external factors that have heightened the pressure on cryptocurrencies include the recent Federal Reserve policy changes and appreciation of the U.S dollar.
However, given that Dogecoin is currently the most popular meme coin and continues to have an active trading community, this indicates that it could be sustainable in the long run.
Nonetheless, Dogecoin is under pressure at $0.34898 and $0.37835, the 49-day and 13-day moving averages, respectively.
These levels will need to be taken out for a sustained recovery but bears remain in control of the near-term direction suggesting that this may be a tough task without the help of buyers.
Crypto analyst Kevin Capital pointed out that such price movement can be observed during the previous market cycles where whales start unloading their tokens and cause a price drop for some time.
He also said that short term risks are still there but a bullish reversal can be seen in January as market conditions start to normalize.
This is in line with overall sentiment in the cryptocurrency market which has been buoyed by institutional investors and key events like pro crypto Donald Trump US election win that might push prices higher.
