 ▲ Dogecoin (DOGE) |
Dogecoin (DOGE) is facing downward pressure just ahead of a potential rally due to selling by small-scale investors and declining confidence among long-term holders.
According to crypto media outlet BeInCrypto on March 11 (local time), Dogecoin has recently been moving sideways within a narrow price range while attempting a breakout, but risks losing momentum amid a lack of investor conviction. BeInCrypto analyst Aaryamann Shrivastava noted signs of retail investor exit in the Dogecoin market, warning that this could become a major obstacle to price gains. “As small holders begin offloading assets to realize profits, the overall market sentiment is weakening,” he explained.
Selling pressure from retail investors is evident in the data. Addresses holding between 100 and 100,000 DOGE have released more than 80 million DOGE into the market over the past week. Although the holdings, worth approximately $7.2 million, represent only a small portion of Dogecoin’s total market capitalization, their psychological impact on the market is significant. This retail exodus suggests that confidence in Dogecoin among grassroots holders is thinning.
Signs of unease are also emerging among long-term holders. On-chain data from Santiment shows that Coin Days Destroyed (CDD) has surged over the past 11 days, surpassing February levels. An increase in CDD indicates that previously dormant coins are moving more frequently, which can be interpreted as a signal that long-term holders are preparing to sell rather than endure the current price stagnation. A shift in sentiment among long-term holders, who have historically acted as a support base during downturns, could pose a negative variable for future price action.
Meanwhile, the Money Flow Index (MFI), a technical indicator, is showing bullish divergence as the price and the indicator move in opposite directions, leaving hope for a rebound. A rising MFI suggests capital inflows into the market and could theoretically signal a strong price breakout. However, without accompanying investor conviction, an uptick in the indicator may prove temporary. If selling pressure outweighs the indicator’s positive signal before an upward trend fully develops, Dogecoin could fail to break out of its range and revert to a downward trajectory.
Dogecoin’s next move will likely depend on whether selling by retail investors spreads to large-scale whales. If the current small-scale liquidation leads to a broader capital outflow, Dogecoin could lose its support level and return to a downward channel. Market participants are closely monitoring Santiment’s real-time data and changes in open interest in the futures market as they search for Dogecoin’s next direction.
*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from its use. The information provided should be interpreted for informational purposes only.*