Dogecoin has been subjected to high selling pressure over the last week, with most large holders selling substantial amounts of their holdings. The meme cryptocurrency dropped to a level below the $0.18 mark, losing approximately 5 billion of its market capitalization.
According to data from the blockchain analytics platform Santiment, wallets holding 10 million to 100 million DOGE sold approximately one billion coins during this period. Analyst Ali Martinez highlighted this trend in his commentary, which noted that outflows from these whale addresses have continued since mid-October. These wallets usually consist of early investors and traders in the market who stacked their positions at previous prices.
The selling activity caused the market capitalization of Dogecoin to decrease by $30.6 billion, from $55.7 billion on October 28 to $25.1 billion on November 4. On Tuesday, the cryptocurrency dropped to a low price of $0.1657, representing a 4.75% decrease over the last 24 hours. This was behind the overall cryptocurrency market, which fell by approximately 3.7% during the same period.
Technical Breakdown Triggers Cascade Effect
The drop became more rapid as DOGE crossed the support group at the crucial level of around $0.18. This technical glitch led to automatic selling on major cryptocurrency exchanges. This major breach of the most important level resulted in the execution of predetermined exit strategies by many algorithmic trading systems.
Fueled positions were a cause of market turmoil. Cryptocurrency derivatives worth over $1.36 billion were liquidated in a single day. Disproportionate to the number of forced closures was Dogecoin. It has been reported that one trader made over 36 million dollars selling DOGE and Ethereum, among other key tokens, when the market was down.
Trading Volume Surges Despite Price Drop
The activity in the market was also extremely high as prices decreased. There was a 90% increase in daily trading, reaching an average of $ 3.9 billion. The volume spike is indicative of divergent market sentiment. As the big players sold out, they viewed the dip as a buying opportunity for smaller traders.
This means that the difference between the whale and the retail activities indicates varying investment strategies. Early accumulators and institutional players made gains after accumulating for several months. Meanwhile, retail participants tried to grab value at lower prices or to trade in a short-term volatility.
On-chain data reveals that the whale selling started slowly in mid-October and has escalated in recent days. These sales are systematic, which means that they were an indication of planned profit-taking rather than panic selling. Another possible repositioning by market makers is before future volatility in the traditional financial markets.
The cryptocurrency market faces numerous headwinds. The risk appetite has been reduced by increasing interest rates, uncertainty in regulation, and macroeconomic fears. The speculative nature of meme coins and the lack of fundamental usage purposes make Meme coins, including Dogecoin, especially susceptible to sentiment changes.
Source: https://coinpaper.com/12102/dogecoin-plunges-17-as-whales-dump-one-billion-coins-in-seven-days
