Journalist
Posted:
- Retail DOGE holders have been purchasing more of the coin.
- The price DAA showed that this could be a good entry before a new rally.
Dogecoin [DOGE] shrimp have increased their holdings, according to AMBCrypto’s analysis of Santiment’s data. Shrimp are crypto investors representing the retail group.
In the case of Dogecoin, this cohort is the group that owns between 0.01 and 100 coins.
While this cohort represents a small portion of the total Dogecoin supply, the address balance is a benchmark showed that the number has increased.
Source: Santiment
DOGE shine one more time?
Usually, retail investors find it difficult to make significant profits in the market. This is one of the reasons why these small investors are running to meme coins because the prices can explode at any time.
So the increase in retail balance is an indication that holders were looking for DOGE to rally.
In the last 30 days, the price of Dogecoin has increased by 19.35%. However, the sentiment exhibited by this retail cohort points to the hope that DOGE could replicate the form it had around the 2020-2021 cycle.
On an all-time basis, DOGE’s performance is up 16.564%, most of which occurred around the aforementioned period.
Source: CoinMarketCap
For Dogecoin to repeat such performance, the cryptocurrency must be in high demand. However, that has not been the case.
One reason is the emergence of other memes with enormous potential. Examples include PEPE, FLOKI and Solana-themed BONK.
So instead of focusing on DOGE, market participants are rotating money into other meme coins. But that doesn’t mean Dogecoin’s shining moment is long gone.
To assess the coin’s potential, AMBCrypto decided to investigate the price-DAA divergence.
It’s time to pull the buying trigger
The price DAA is a short form of price Daily Active Addresses divergence. This metric shows the relationship between an asset’s price action and its active addresses. Investors can also use it in identifying buy or sell signals.
At the time of writing, Dogecoin’s price DAA divergence amounted to 33.19%.
The ratio here implies that the DAA has fallen while the price has risen. Historically, this has been a signal to buy. But the positive result is usually not immediate.
So, those planning to use this strategy may need to focus on its long-term potential.
Source: Santiment
From the technical outlook, Dogecoin showed a long-term bullish signal due to the Exponential Moving Average (EMA). At the time of writing, the 50-day EMA (blue) had crossed the 200-day EMA (yellow).
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This is confirmation that those using HODL DOGE have the potential to be profitable. However, that would not happen without withdrawals.
For example, the value of the Awesome Oscillator (AO) had dropped to 0.0038. The falling value is a sign of increasing downward momentum. So, investors should expect a drop of $0.09 before Dogecoin considers a move up.
Source: TradingView