Dogecoin [DOGE] has been in a retracement over the past three weeks, and the price correction appears not to be ending soon. This trend is happening as the broader memecoin market follows suit.
In fact, the top ten memecoins by market cap are all in the red over the past 24 hours. As spot whales take advantage of the correction, can it help turn around the short-term price direction?
Spot whale accumulation intensifies as price corrects
Whales continue to accumulate the memecoin at discounted prices. That is, the number of DOGE held by whales rose from 18.72 billion to around 19 billion tokens over the past week.
A crypto analyst noted that spot holders bought over 240 million DOGE tokens worth over $20 million. However, this buying activity does not guarantee consequential price appreciation.
Instead, the activity suggests confidence may be building ahead of the next potential rebound. This activity explains the current price action outlook of the memecoin.
Can DOGE’s 0.618 Fib level hold?
On the charts, Dogecoin was trading around the 0.618 Fibonacci retracement level after its strong trend from $0.07 to $0.10. Currently, bulls are facing resistance at $0.085, aligning with the 50% retracement level.
The lower support band of the 4-hour sideways range is at $0.082, which is the most recent demand area that pushed the price to $0.095. Hence, holding above $0.080 and breaking past $0.085 would expose $0.10 again.
But the market structure is mildly bearish, and losing $0.080 as support would reinforce this view. This projection is because the Bull Bear Power (BBP) was red at press time, while the RSI at 40 is 10 points away from the oversold territory.
This indicates that selling pressure is yet to be exhausted. Who were these sellers then?
Why is the price falling?
As per CryptoQuant data, big whales have dominated the Futures Average Order Size since DOGE hit $0.10 on the 22nd of August. This was a hint of profit-taking as large holder activity surged after a rally. Further analysis of the Futures Taker CVD confirmed that sellers were the dominant force.
Source: CryptoQuantAdditionally, the change in Open Interest (OI) was down across major exchanges like Binance, OKX, Bybit, KuCoin, and Gate. For instance, DOGE’s OI fell by 5% on the KuCoin Futures market, as per CoinGlass data.
Therefore, Dogecoin’s price is falling despite whale accumulation due to profit-taking of leveraged orders, OI decline, and derivative selling.
Final Summary
- Dogecoin whales accumulated over 240 million DOGE in the past week amid the recent price correction.
- DOGE was trading at the 0.618 Fibonacci level, which is a key bounce zone, but sellers were yet to be exhausted.
