Dogecoin whales could end DOGE’s muted volatility

Dogecoin (DOGE) price has shown no intention to move higher. But during this month-long consolidation the momentum indicator has improved vastly and is in a better to kick-start an upside move. The on-chain metrics support this ascent and suggest something massive could be on the way.

Also read: Dogecoin eyes 10% rally as DOGE bulls show strength

Dogecoin price likely to break out soon

Dogecoin price rallied 160% between February 22 and March 28  and set up a local top at $0.228. From this peak, DOGE crashed 47% and set up a swing low at $0.120 on May 1. After a 33% recovery in five weeks, DOGE currently trades at $0.160 with muted volatility. This sideways movement below the weekly resistance level of $0.181 roughly coincides with the trend-based Fibonacci tool’s 50% level of $0.173, making it a key barrier to overcome. 

The Relative Strength Index (RSI) has slowly climbed from close to the oversold level to above the 50 mean level in the past month. This steady ascent denotes a surge in bullish momentum for DOGE.

If Dogecoin price manages to overcome the $0.181 level into a support floor, it would potentially kick-start a rally to the March 28 swing high of $0.229. This move would constitute a 26% gain from $0.181. In a highly bullish case, this meme coin could attempt to overcome the $0.279 and retest the 161.8% trend-based Fibonacci extension level at $0.292. 

DOGE/USDT 1-day chart

Judging by Santiment’s Whale Transaction Count (WTC), which tracks transfers worth $100,000 or more, the recent spike suggests that institutional investors are accumulating. If the WTC index spikes after a Dogecoin price rally, then it could be a sell signal, as these whales could be looking to sell. On the contrary, an uptick after a drop indicates willingness to buy the dip and is seen as a buy signal.

DOGE WTC

To confirm this accumulation, Santiment’s Supply Distribution by the balance of addresses metric is used. It can be seen that between May 1 and June 7, addresses holding between 1 million to 10 million DOGE increased their balance by 160 million tokens as their total holdings shot up from 10.20 billion to 10.36 billion. The cohort holding between 10 million to 100 million also grew their stack by 1.03 billion in the same period.

This accumulation suggests that institutional investors are gearing up for something big.

DOGE Supply Distribution

With the recent comeback in meme coins after RoaringKitty’s GameStop investment could be the start of something big, not just for Dogecoin, but the entire meme coin space. Therefore, investors need to keep a close eye on how this narrative unfolds. 

Regardless, if Bitcoin (BTC) price crashes suddenly, it could take altcoins down with it. In such a case, Dogecoin price could take an alternative route. In this case, DOGE could crash 27% to $0.116 to collect the sell-side liquidity. If this move is followed by a quick recovery above the aforementioned level, then investors can expect DOGE bulls to give the uptrend another go. But a failure to do so will invalidate the bullish thesis by flipping $0.116 into a resistance level and create a lower low.