Data from on-chain analytics firm, Blockchair, has revealed an enormous dip in Dogecoin’s daily circulation, less than 36 hours after reaching a 90-day peak. The firm concludes that the coin’s price movement recently is the cause for this massive reduction.
Dogecoin Activity
The coin’s 44% price rise coincided with a period of high network activity and market volume. Following the 90-day peak, DOGE underwent a 13% price correction before an additional 5% dip. The high volatility occurring across the entire crypto market resulted in traders moving their virtual assets to their wallets from the exchanges.
Usually, traders and investors don’t move their funds from exchanges unless there is price instability or a continuous rise in volatility. During these times, there is always a drop in daily circulation. Analysts agree that there is a direct relationship between the virtual asset’s value growth and huge volumes in the market activity. Asset movements by whale wallets often result in a rise in volatility because the volume and not the number of transactions determine daily circulation.
DOGE Eyeing Another Upside?
Throughout this week, most investors have been moving their assets from the ‘principal’ cryptocurrencies (BTC, ETH, and XRP) to DOGE-themed cryptocurrencies, including Dogecoin. Except for the past 36 hours, DOGE price action has been bullish almost throughout the week as it aims to end the week with a 16.5% gain. Currently, DOGE price is within an upside consolidative mode with lower margin trades recorded on the 24-hour timeframe.
The 200-day moving average suggests that DOGE is struggling to stabilize at the $0.2862 price range as its price correction continues in today’s trading session. Various metrics last Sunday confirmed that DOGE has been trading within a falling channel for the past 60 days before breaking out of it and surging by 28% on October 28. The breakout was the consequence of a close above the dipping trendline resistance, which stood at $0.273 at that time.
So far, DOGE bulls have managed to close above the upswing displayed by the rising 200-day MA. However, a sharp decline in the RSI is attributed to the dip in the DOGE price. The price correction seems temporary and might serve as a buying opportunity for DOGE enthusiasts, provided the RSI remains higher than the midline. Once the bulls regain control, DOGE could set a new multi-month peak price over the $0.3560 range. If it can flip that multi-month peak price to support, its next resistance will be at the $0.4433 range.
DOGE/USD 24-hour chart. Source: TradingView
On the other hand, should the price correction stay longer than expected, the $0.2650 price might become its next resistance. If the dip continues and there is an intersection between the 21-day MA and the 100-day MA, the $0.2492 price will act as the next support.
DOGE and its fellow pupcoin, SHIB, remain locked in the battle of supremacy following recent interest in SHIB over DOGE and broader adoption for it than DOGE. The reduced demand for DOGE was part of a 36% loss recorded by Robinhood, as stated in its recently released Q3 report.
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