Will Dogecoin feel the effect of this massive 990M transfer

• A whale transferred 990 million Dogecoins to another address.
• DOGE might drop below $0.08 in the short term.

Blockchain whale tracking platform Whale Alert revealed that 990 million Dogecoin [DOGE] was moved from one wallet to another on the 16th of January.

According to the post, the coins were worth $79.75 million. However, Whale Alert noted that it could not verify the public profile of the participants of the transaction.

? ? ? ? 990,000,000 #DOGE (79,757,842 USD) transferred from unknown wallet to unknown wallethttps://t.co/Jtf8HzANTK

— Whale Alert (@whale_alert) January 16, 2024

If the coins were sent into an exchange, then one would assume that it was for sale. But as of this writing, one cannot say if the transaction would end up in a sale. However, AMBCrypto found out that such transactions seemed “normal” within the Dogecoin ecosystem.

DOGE wants to fall

On the 9th of January, a similar transaction took place. About one billion coins were moved from Binance to another wallet. Moments after that transaction, DOGE rose from $0.076 to $0.085. Between that time and press time, DOGE’s price had dropped and was changing hands at $0.082.

In terms of the trading volume, on-chain data showed that the metric had decreased to $296.74 million. This value was a significant decrease from the $1 billion peak it hit on the 12th of January.

Source: Santiment

Furthermore, the decline suggests participants had reduced their involvement in buying and selling the coin. Two other metrics AMBCrypto considered were the Dogecoin circulation and the Open Interest per exchange.

Circulation shows the number of coins involved in transactions within a given timeframe. When the metric decreases, it means there is less risk of selling pressure. However, an increase in circulation suggests an increase in usage.

Although this does not occur all the time, an increase in circulation could foreshadow a price decrease. At press time, DOGE’s one-day circulation had increased to 14.48. Like the circulation, the Open Interest on exchanges also increased to 111.96 million.

Source: Santiment

A breakout can’t be found

When combined, the increase in circulation and Open Interest suggests a possible DOGE decrease. The Accumulation/Distribution (A/D) indicator also supported this potential. Based on the 4-hour chart, the A/D had stalled at 27.14 billion.

This position implied that while distribution had halted, accumulation was also not present. Either way, Dogecoin might drop below $0.08 or keep moving between $0.080 and $0.083 in the meantime.

Furthermore, the Bollinger Bands (BB) showed that volatility was low as the bands contracted.

Read Dogecoin’s [DOGE] Price Prediction 2023-2024

This also confirmed the bias that DOGE would find it hard to breakout. But if bulls increase buying pressure, DOGE could breach the $0.083 resistance.

Once this happens, a move toward $0.09 could be next. However, that might not be the case in the short term. But if altcoins start to move upwards again, DOGE’s price might also increase.

Source: TradingView