Dogecoin’s large transactions increased from 15.27 billion to 21 billion. Foreign exchange inflows also reached an eight-week high of more than $623 million, which could increase selling pressure.
Dogecoin (DOGE), the largest meme coin by market capitalization, is one of the best performing among the top 10 largest cryptocurrencies. DOGE has gained 13% in the past 7 days and is trading at $0.12 at the time of writing.
CoinMarketCap data shows that trading volumes have surged by nearly 60% as of this writing, with these gains coming from increased interest in meme coins.
Whales likely contributed to the increase in volume as DOGE’s large trades increased by 40% to 21 billion tokens, the highest level in four months.
Source: Into the Block
This spike indicates increased whale activity around DOGE, which may be behind the recent fluctuations. However, a closer look at exchange inflow data shows that this surge could also lead to selling pressure.
On October 16th, over 623 million DOGE tokens were sent to exchanges. This was the highest level of foreign exchange inflows in the past two months.
Source: Into the Block
Large trades and a surge in foreign exchange inflows suggest that DOGE is in a distribution phase where whales are profiting, and the uptrend may weaken.
Dogecoin price analysis
Looking at the daily chart, we can see that DOGE has completed a bullish W pattern. This is a bullish reversal pattern that suggests DOGE is resuming its uptrend, and the next price target is set at $0.146.
Source: Tradingview
However, for DOGE to realize this breakout, it will need to reverse resistance above the 200-day simple moving average (SMA). Chaikin Money Flow is positive, indicating that buying pressure is still higher than selling pressure, which could support this breakout
If DOGE fails to reverse this resistance, it may fall until it tests the support at the 0.236 Fibonacci level ($0.109).
Dogecoin’s recent rally appears to be driven by open interest surging to a four-month high of $795 million at the time of writing. This increase indicates that traders are opening new positions in DOGE.
Source: Coinglass
However, given that the long/short ratio has declined from 1 to 0.86 at the time of writing, this spike could suggest that traders are starting to take short positions.
Realistic or not, the DOGE market cap in BTC terms is:
Furthermore, the increased interest in DOGE by futures traders is not seen in the spot market. As reported by AMBCrypto, the number of Dogecoin holders has decreased by more than 106,000 over the past week.
This indicates that the meme coin is in a distribution stage where traders are likely locking in profits.
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