Dogecoin (DOGE) remains near $0.06 levels while the bulls have failed to book gains in the recent September jump in the crypto market. Data shows that miners’s wallet movements suggest bearish sentiment among them. These actions could seriously hurt Dogecoin prices since they hold a significant portion of supply.
Source: IntoTheBlock
Miners are withdrawing their holdings, squeezing Dogecoin to a 30-day consolidation at the $0.06 range. It remains to be seen if the bulls can prevent DOGE price from sinking to historic lows.
Since mid-August, the price of Dogecoin has evidently been frozen at the $0.06 – $0.063 area. Despite brief upward headwinds in the larger crypto markets, the consolidation has continued. As of August 17, the miners possessed 4.67 billion DOGE in total, as shown below. But since then, the amount has gradually decreased, reaching 4.35 billion DOGE on October 5.
It means that Dogecoin miners have sold 320 million DOGE from their total reserves between August 17 and October 5. The chart below shows the balances of the most well-known Dogecoin miners and mining pools’ wallets as of the moment. In dollars, miners have sold Dogecoin worth $19.2 million between August 17 and October 5.
The DOGE price consolidation seen since August 18 is largely due to the selling craze among Dogecoin miners. Such a sharp drop in miners’ reserves typically indicates that node validators are selling off a sizable portion of their block rewards. When the supply of newly produced coins keeps growing, the market price is under pressure to decline.
On the other hand it is to be seen if pther market participants and key stakeholders will push the price of Dogecoin towards the moon.
Traders balance the bearish impact by $28 million in fresh capital inflows
Traders have made significant influx of capital into Dogecoin, investing $28 million in the memecoin. Similarly, the open interest stood at an average of $205 million on September 21 while gradually increasing to $235 million by October 5.
In the derivatives market, open interest represents the total value of open futures or options contracts for DOGE. Increased Open Interest is a sign of higher investments and a more positive market climate.
The influx of $28 million could be the reason why Dogecoin held itself at $0.06 levels. The reserves of Dogecoin miners are currently at an all-time low, and it follows that their impact on price movement may start to diminish. If traders continue to add new capital, DOGE may avoid a significant market breakdown.
With the miners and traders adopting opposing positions, the price action is expected to stay neutral. The graph below displays how 410,000 addresses purchased 15.1 billion DOGE at the minimum price of $0.062. The miners could stop the price from rising if they continue to sell.
Source: IntoTheBlock
Miners wont be able to force a decline below $0.055 if the bullish speculative traders act as a barrier. The chart above also shows how 465,000 addresses purchased 6.45 billion DOGE coins at the maximum price of $0.060. However, if that crucial support level is breached, the Dogecoin price may go closer to $0.05.
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