Financial Analyst
Published:
Main Points
Why is Dogecoin Showing Strength While Other Meme Coins Struggle?
Dogecoin is up over 9% even with the market declining 20%. Buyers are
holding strong at a key support level established in June.
What Factors Could Drive Dogecoin’s Price Higher?
Large investors are accumulating Dogecoin, which is decreasing the
available supply and strengthening the technical outlook.
The meme coin sector is experiencing the effects of the recent market
downturn.
The total market capitalization of meme coins has fallen by 20% from a high
of $83 billion in less than two weeks, wiping out roughly $18 billion in
value. Most major meme coins are currently trading below critical support
levels, indicating they may be oversold and vulnerable to further price
drops.
Dogecoin [DOGE], however, is maintaining its position. While other established meme
coins like
Shiba Inu [SHIB]
have decreased by 3% this month, Dogecoin has increased by over 9%,
marking its fourth consecutive month of gains at a price of $0.22.
Chart Source: TradingView (DOGE/USDT)
Despite the widespread selling pressure, buyers have successfully defended
its crucial support level.
Dogecoin has consistently closed each month since June at a higher price
than the previous month, highlighting its fundamental strength. The $0.22
price point has remained stable, providing buyers with a solid foundation
to potentially target the next resistance level.
Historically, Dogecoin has performed well in October. In the last four
years, October has produced average gains of over 50%. Could Dogecoin be
aiming for $0.35 as its next monthly high?
Strong On-Chain Data Supports Dogecoin’s Technical Position
The largest holders of Dogecoin have recently been actively reducing the
available supply.
During the third quarter, whales holding between 100 million and 1 billion
Dogecoin tokens added approximately 5 billion more to their holdings,
bringing their total to 28.85 billion – roughly equivalent to the combined
holdings of the next two largest whale groups.
While this represents only 20% of Dogecoin’s total supply of 150 billion,
this concentrated accumulation can significantly impact the price by
decreasing the available supply and strengthening overall support.
Source: Santiment
For example, Dogecoin reached $0.27 in mid-September, resulting in roughly
$1 billion in profits being realized. However, the price movement remained
moderate as whales accumulated nearly 2 billion coins during the same
period.
In conclusion, large investors are decreasing the supply of Dogecoin,
strengthening its technical foundation.
Given this setup, Dogecoin could potentially close October with its fifth
consecutive higher high in the second half of the year, targeting $0.35 as
the next objective. If this trend continues, it could set the stage for a
positive fourth quarter, potentially leading to further gains by the end of
the year.