Two weeks ago, Dogecoin (DOGE) was priced at $0.13, fueling speculation that the meme coin was heading back to its yearly highs. However, Dogecoin’s ambitions to achieve that value are fading as Dogecoin’s price has fallen by 8.86% in the past seven days.
This change has caused concern among DOGE investors who initially thought the uptrend would erase the losses they had endured for months. Contrary to these expectations, this analysis revealed that the cryptocurrency may continue to decline before a major breakout.
Dogecoin investors abandon coin for now
On Monday, October 7th, Dogecoin’s open interest was $1.35 billion. Open interest refers to the sum of all open positions or contracts in the market. Technically, OI, as it is commonly called, measures speculative activity.
As OI increases, buyers become more aggressive and put more money into the contract. A decrease means that sellers are in an advantage and are closing out existing positions more and more.
Currently, DOGE’s OI has plummeted to 801.99 million, indicating that traders have removed approximately 458 million from crypto-related contracts within the past 24 hours. From a price perspective, this significant decline suggests that Dogecoin price is likely to break into fundamental support.
Read more: Dogecoin vs Bitcoin: The ultimate comparison
Dogecoin open interest. Source: Santiment
This development contradicts recent bullish predictions that crypto whales will buy DOGE in preparation for a potential breakout. But IntoTheBlock’s data reveals that things have changed on that front as well.
At the time of writing, net flows among large Dogecoin holders have declined significantly after rising to impressive heights on October 4th. This net flow measures the percentage difference between the value of the coins the whales bought and the value of the coins they sold.
When it goes up, it means that crypto whales have bought more coins in a given period of time. The notable decline in DOGE status suggests that most large investors have sold, putting downward pressure on Dogecoin’s price.
Large Dogecoin Holder Netflow. Source: Into the Block
DOGE Price Prediction: Bullish Story Fades
Looking at the daily DOGE/USD chart, we can see that the coin is forming a head and shoulders pattern. This pattern indicates that an uptrend is nearing an end and a significant reversal from bullish to bearish.
As seen below, Dogecoin price is $0.10, right at the neckline of the pattern. There are also fluctuations in trading volume, but what is noteworthy is that selling activity is outpacing buying pressure. This position could cause Dogecoin price to fall to $0.093. If the price falls below this level, it could fall to $0.080.
Read more: How to buy Dogecoin (DOGE) and everything you need to know
Dogecoin daily price analysis. Source: TradingView
If investors continue to hold DOGE without selling, the coin could gradually appreciate as buying pressure increases. In this scenario, Dogecoin price could jump to $0.15.
Disclaimer
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