Dogecoin has performed strongly recently, rising over 16% in the past week, but the price has been stagnant in the past day. On-chain data shows that sellers may be taking profits, leading to a short-term price stagnation or correction. The key support level will determine whether Dogecoin continues to rise or falls.
Profit-taking pressure and capital flow
1. Profit address ratio: Recently reached 84%, consistent with the end of July, after which the price fell from $0.24 to $0.19 within a week. History shows that a high profit ratio often accompanies selling.
2. Net flow to exchanges: On August 10, there was a net outflow of $52 million, which turned to a net inflow of $2.7 million on the 11th, indicating more Dogecoin is entering exchanges, and traders may be preparing to sell.
Additionally, the realized profit ratio (SOPR) indicator also suggests that the market may enter a cooling phase.
This indicator measures the profit or loss status when tokens are sold; a value above 1.0 indicates that holders are making a profit. On August 10, Dogecoin's SOPR rose to 1.045, close to the level at the end of July, after which the price quickly corrected.
This indicates that the market may soon face another short-term cooling point, and the rise in SOPR aligns with a market narrative dominated by selling.
From the chart's trend, key price levels may determine Dogecoin's next direction.
Dogecoin fluctuates around $0.235 on the 4-hour chart, slightly below the trend line of a descending triangle. This pattern is biased towards a short-term decline, likely indicating consolidation rather than a crash.
The Fibonacci level at the bottom of the triangle is key support, and the price has now broken through several related points around $0.23. If it breaks below $0.235, attention should be paid to the $0.22 support level.
Holding above may attract buyers; breaking below could lead to a decline. If it breaks through $0.24-$0.246, it will break the triangular pattern and may aim for above $0.25, maintaining the upward trend. Currently, $0.22 is the key dividing point determining its rise or fall.
