This week has turned out to be one of the best for Dogecoin holders courtesy of its impressive performance. The king of the memecoin was the top gainer among the top cryptocurrencies, even outperforming Bitcoin’s latest performance.
Dogecoin was up by 19% in the last 7 days at the time of writing compared to Bitcoin’s 9% gain over the same period. Its monthly gain was even more impressive considering that it soared by as much as 77% from its October lows to its monthly high.
Dogecoin’s lowest price in October was $0.101 while its highest price was $0.179. It pulled back by over 5% to a $0.169 press time price, indicating that significant amount of profit-taking was happening. However, this was not surprising considering various key observations.
– Advertisement –
The first is that price recently retested a previous resistance level above $0.175. It was also extremely overbought at its recent peak, which may have further incentivized profit-taking.
Another major reason for the recent performance was that Dogecoin has been trading within a cup and handle pattern. The latest surge was a text-book scenario of how price concludes the pattern, ending with the same price range where it started.
Dogecoin Bulls Backed by Heavy Whale Accumulation
Dogecoin flows reveal that the latest run-up was characterized by robust accumulation by whales. Large holder flows peaked at 1.36 billion DOGE on 29 October, the highest level of inflows in the last 4 weeks. Meanwhile, large holder inflows peaked at 782.45 million DOGE which was notably lower.
Note that the large holder flows data is a lagging indicator hence it did not include data for the last 24 hours. Nevertheless, it provided a healthy profile explaining why the memecoin delivered such a strong bullish performance.
Dogecoin exchange data corresponded with the recent demand from large holders. However, exchange inflow volume peaked higher at 888.84 million DOGE compared to exchange outflow volume which peaked at 697.14 million as of 29 October.
The higher exchange inflows compared to outflows indicates that a substantial number of investors were preparing to sell. This aligned with the latest top and the retracement observed in the last 24 hours.
But what comes next? Well, the cup and handle pattern usually ends with a retracement after the price peaks. This suggests that DOGE may experience some downside in the next few days. It is possible that price may fall as low as $0.129. This is based on the support range that the price demonstrated initially when the pattern began.
Analysts also expect prices to react based on the outcome of the upcoming election. An outcome favorable to crypto may encourage Dogecoin holders to HODL for longer in anticipation of potentially higher gains.
