DOGE Price Skyrockets by 95%, Will Profit Taking Cause a Decline?
The recent surge in the price of Dogecoin has caught the attention of many investors. In just two weeks during February, the number of DOGE holders increased by over half a million. However, despite this impressive growth, there are concerns about the sustainability of this rally.
Currently, DOGE boasts a record number of 6.5 million holders, making it one of the most popular cryptocurrencies in the market. This milestone was reached on February 2, following a surge in holders from 5.82 million on January 28 to 6.35 million on February 10. This upward trend in holders coincided with a price surge, with DOGE prices increasing by approximately 141% from $0.081 to $0.1950 between February 10 and March 4.
However, since the beginning of March, the number of DOGE holders has remained relatively stable. This could indicate that new money is not flowing into the cryptocurrency, as investors may be uncertain about the continuation of the bullish sentiment.
Another factor that could potentially impact DOGE’s price is the high number of profitable holders. Currently, over 5.24 million addresses are in profit, accounting for 84.75% of all holders. This significant majority of profitable holders could create selling pressure, as many may choose to capitalize on their gains and sell off their holdings. The last time the percentage of profitable DOGE holders was above 80%, a significant market adjustment followed, resulting in a correction of 67.86% over the subsequent five weeks.
Technical analysis of DOGE’s price suggests a potential bearish trend. The short-term 9-day Exponential Moving Average (EMA) has dipped below the 26-day long-term EMA, indicating increased selling momentum. If this downward trajectory continues, DOGE may test the established support level at $0.15. Further bearish pressure could push the price down to the next support level around $0.12.
On the other hand, a bullish scenario could unfold if DOGE remains above $0.15 and breaks the resistance at $0.1646. This could signal a trend reversal and potentially trigger an uptrend, especially if trade volumes increase. It’s worth noting that DOGE’s price performance often correlates with movements in Bitcoin (BTC) and Ethereum (ETH), so favorable conditions for these cryptocurrencies could also contribute to a DOGE rally.
As with any investment, there are risks involved, and readers should exercise caution. The information provided here is for general informational purposes only and should not be taken as financial advice.