Whale Dogecoin steps back, retail investors join the fray – Where will the market head?

Dogecoin (DOGE) started the first week of December with a correction, falling 6.3% in 24 hours and trading around the 0.14 USD mark. The market capitalization of this memecoin currently stands at 21 billion USD at the time of writing, while recent on-chain activities seem to be strongly impacting the current price action.

This decline coincides with the resurfacing of Vitalik Buterin's old remarks about Dogecoin (DOGE). Previously, Vitalik had given considerable praise to DOGE in interviews, prompting the community to once again focus on the future of this coin.

The big question is: Can DOGE bounce back strongly after the fall, or will the price continue to go down in the near future?

Concern over Dogecoin activity

According to data from Santiment, the number of “whale” transactions – those over 1 million USD – has sharply decreased over the past two months, from 285 to under 38 at the current time.

This significant decline indicates that institutions and large investors are being cautious, gradually reducing their level of participation in the DOGE market. As a result, the price of this coin remains below the level before the 2024 elections, amidst a prolonged correction lasting two months.

Source: Ali Charts/XDuring the same period, the price of Dogecoin plummeted from 0.271 USD to a low of 0.13 USD. Such deep falls have previously marked significant turning points in the market, but the question arises as to whether the current price action reflects any notable signals from on-chain activity.

How are traders acting?

Data from CryptoQuant shows that “large entities” in the Spot market are accumulating, which is in stark contrast to the Futures market. However, their accumulation process is quite slow, reflecting the caution in the strategies of large investors.

Source: CryptoQuantMeanwhile, the Futures market mainly focuses on individual investors, who have limited capital and lack influence, causing price fluctuations to be weak. This is part of the reason explaining the dull atmosphere in the market today.

The market sentiment index further highlights this disparity. Retail investors in the Futures market are showing pessimism, with the index reading at -1.32, indicating they are selling memecoin, contributing to the slowdown in price action.

Source: Market ProphitConversely, the “Smart Money,” despite representing a small number, maintains a slightly optimistic attitude, sending mixed signals about the price action of DOGE in the near future.

Can DOGE increase in price?

Recent charts show that Dogecoin has surpassed an important price level, opening up new growth prospects. Historical data for Q4 2024 indicates that each time Dogecoin breaks the support level touched twice before, it is usually followed by a strong price increase.

Trader Tardigrade, a well-known analyst on X, believes that Dogecoin has the potential to break out, even surpassing the 0.60 USD mark. This phenomenon is reminiscent of the previous fall, when Dogecoin dropped below the second support level, as illustrated in the chart.

Source: Trader Tardigrade/XHowever, everything still depends on the overall picture of the cryptocurrency market. Although the market is going through a difficult phase and Dogecoin is no exception, the on-chain signals along with recent price action suggest that the correction may soon be coming to an end, paving the way for upcoming bullish opportunities.

SN_Nour