- Despite the accumulation, DOGE’s price might face resistance at $0.15.
- Traders looking to short the coin might get burnt as a recovery might happen quickly.
The number of Dogecoin [DOGE] addresses holding between 100,000 and 1 billion coins has increased, AMBCrypto can confirm.
Employing data from Santiment, we noticed that the accumulation started around the 2nd of April.
Typically, a surge in these addresses is a sign that demand for the coin has increased. And if demand increases, the price of DOGE is supposed to rise.
DOGE plans to win
But in most cases, this potential price increase does not happen immediately. This is because some sell-offs could be happening at other ends.
As of this writing, DOGE’s price was $0.14— a 28.18% correction in the last 30 days.
However, if the number of large addresses scooping the coin at discount prices increases, then Dogecoin might soon begin a rally that takes it back to $0.18.
Source: Santiment
Furthermore, AMBCrypto looked at the Market Value to Realized Value (MVRV) Z Score. This score checks if a cryptocurrency is in a bear or bull phase.
When the MVRV Z Score is negative, it implies that the market is in a bear cycle. But for Dogecoin, the metric was 52.83%, indicating that the coin has held on to its bull phase.
However, the metric was falling, suggesting that the price might come down again. Should this be the case, DOGE might trade at $0.12.
As a trader, a potential drop to this price might be enticing. However, it is important to check other metrics before deciding to go all in.
Source: Santiment
Wait for a decline before placing the trade
For this part, AMBCrypto analyzed the liquidation levels. With the liquidation levels, traders can have an idea of a cryptocurrency’s next movement.
This is because the indicator shows areas of high liquidity and prices where large liquidation levels might occur.
According to Hyblock, high liquidity only appeared at $0.15, meaning that it could be challenging for DOGE to reach this price.
If this remains the case, you might need to overlook buying DOGE at this point. But if the price goes lower, then it could be a good entry point.
In terms of entry point, the Cumulative Liquidation Levels Delta (CLDD) gave insights into Dogecoin’s prediction. As of this writing, the CLLD was negative.
Source: Hyblock
Positive values of the CLLD indicate that there are more long liquidations in the market. On the other hand, a negative CLLD suggests that shorts are facing a chunk of the position wipeout.
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In addition, the negative CLLD confirmed the latter part of the statement above.
For the price, the negative reading of this indicator implies that later shorts might be punished, as Dogecoin could begin a sharp recovery in no time.
