The meme coin Dogecoin (DOGE) recently demonstrated a moderate price recovery, rising 36% over the week. However, this increase faces potential obstacles as long-term investors have begun selling their assets in significant volumes.
This selling trend could cause volatility, making it difficult for Dogecoin to maintain its recent gains.
Key Dogecoin investors are taking profits.
The Age Consumed indicator for Dogecoin showed a sharp spike, indicating that long-term investors are selling their assets with an intensity not seen since June 2023. This surge in selling is the largest in nearly two years, highlighting a shift in investor behavior.
Long-term investors are often considered the foundation of cryptocurrency stability, so their decision to sell could lead to increased volatility in the market.
As long-term investors liquidate their positions, this selling pressure could undermine the current rise. The decrease in assets among long-term investors might also raise concerns among short-term traders, creating uncertainty. The overall macro momentum for Dogecoin shows mixed signals. According to the Ichimoku cloud indicator, Dogecoin continues to exhibit bearish momentum. Although the price candles are above the cloud, indicating a potential upward trend, the pressure from long-term investors' selling could shift this momentum.
Despite the Ichimoku cloud position indicating some positive movement, prolonged selling by long-term investors could quickly dampen any optimism. If selling pressure persists, it may lead to a reversal in price momentum, hindering Dogecoin's ability to maintain recent gains. The price of Dogecoin needs to secure its profits.
Although the price of Dogecoin has risen 36% this week, it remains vulnerable to dropping below $0.200. The recent increase, while impressive, is still subject to ongoing selling pressure from long-term holders. Thus, Dogecoin may face challenges in maintaining its price above current levels.
At the time of publication, Dogecoin is trading at $0.234, approaching a critical support level of $0.220. If the price fails to hold this level, it may drop to $0.198, negating a significant portion of the recent rise.
This would indicate that selling pressure outweighs bullish momentum, potentially causing further declines. However, if Dogecoin manages to establish a support level at $0.220 and bounces off it, it may try to turn $0.245 into a support level.
A successful move above $0.245 will pave the way for growth to $0.268, allowing Dogecoin to refute the bearish forecast and maintain an upward trajectory.#Write2Earn #BinanceSquare #TradeOfTheWeek #crypto #Binance $DOGE
