Dogecoin dips by 11% this week as whale balances shrink

Key Takeaways

• Dogecoin hovered near $0.085 on Friday, marking a weekly decline of over 11%.
• Since Tuesday, two tiers of large-scale wallets have shed a combined 100 million DOGE.
• A daily close under $0.084 could trigger further drops toward $0.078 and $0.070, while immediate resistance sits at $0.086.

Dogecoin was priced around $0.085 on Friday, hovering near a crucial trendline following an 11% slide over the course of the week.

This downward momentum is being fueled by shrinking balances among major holders and deteriorating technical indicators. However, the derivatives market presents a more nuanced outlook, as long positions currently outnumber shorts according to CoinGlass’ tracked ratio.

Whales and Large Holders Scale Back DOGE Holdings

According to supply distribution metrics from Santiment, wallets holding between 1 million and 10 million DOGE, alongside those holding between 10 million and 100 million DOGE, have divested a collective 100 million tokens since Tuesday.

This reduction points to large investors scaling back their exposure, likely to lock in profits. While these balance adjustments do not guarantee that every single token was sold on the open market, the shift intensifies anxieties regarding near-term selling pressure.

Data from CryptoQuant also counsels caution, highlighting overheated conditions across both spot and futures markets, coupled with substantial order sizes and sell-side dominance in futures trading.

These indicators suggest that bearish pressure remains heavy as the meme coin edges closer to its immediate support levels.

Despite the downward price action, CoinGlass’ DOGE long-to-short ratio reached 0.90 on Friday, nearing its highest mark in over a month. A ratio above 1.0 indicates that long accounts or positions outnumber shorts within the tracked dataset.

Additionally, funding rates remained positive at 0.0010%, meaning buyers holding long positions were paying short sellers to keep their trades open.

Combined, these derivatives metrics indicate that some market participants are betting on a rebound. However, this positioning does not guarantee that buying interest is robust enough to spark a reversal, especially given the asset’s weak underlying price momentum.

Dogecoin Tests $0.084 Support as Technicals Weaken

Dogecoin is currently hovering just above a critical trendline support level at $0.084.

Should the price register a daily close below this threshold, it could pave the way for a drop to $0.078, with a more severe retracement potentially exposing the next key structural support at $0.070.

Technical indicators reflect this bearish tilt. The Relative Strength Index (RSI) is hovering near 40, remaining below the neutral 50 level and signaling weak buying pressure.

Meanwhile, the Moving Average Convergence Divergence (MACD) line is positioned below both its signal line and the zero mark. The MACD’s negative and slightly widening histogram further suggests that sellers maintain control in the short term.

DOGE also remains pinned below several crucial exponential moving averages (EMAs), which are acting as sequential hurdles to any upward move.

The initial obstacle is the 100-day EMA near $0.086. Just above that, the 50-day EMA and a horizontal resistance level converge around $0.088.

Surpassing these price points would help neutralize immediate bearish momentum. However, a more sustained bullish reversal would require reclaiming the 200-day EMA at $0.093, followed by a breakout past major resistance around $0.102.

For the time being, the interplay between the $0.084 support floor and the overhead moving averages will dictate whether Dogecoin can find its footing or if it will continue its weekly descent.