The price of Dogecoin (DOGE) has remained relatively stable despite a surge in coin accumulation, as evidenced by its increasing Money Flow Index (MFI).
The prominent meme cryptocurrency continues to operate within a horizontal trading channel, suggesting that the current buying interest may not be sufficient to initiate a breakout.
Increased Momentum Needed for Dogecoin Demand
DOGE’s MFI, which reflects the inflow and outflow of money into the asset, has shown an upward trend over the past few days. Typically, a rising MFI indicates higher demand for an asset.
However, the recent sideways price action of DOGE suggests that this demand remains tepid. This presents challenges for a rally above the upper boundary of the horizontal channel, which acts as resistance around $0.11.
A decrease in whale activity corroborates this perspective. On-chain data indicates a gradual reduction in daily transactions by whales valued above $100,000 and $1 million.
Additionally, the netflow among DOGE’s large holders has dropped by more than 112% over the last month, indicating significant distribution among investors possessing at least 0.1% of the token’s circulating supply.
Further Reading: How To Purchase Dogecoin (DOGE) and Essential Information You Need
DOGE Price Outlook: Potential for a 14% Decline
Given the lack of whale activity, DOGE may struggle to rally beyond its resistance level. A failed attempt to breach this level could lead the price of the meme coin to slide towards the support at $0.10.
If bulls cannot maintain this pivotal support level, a continued decline may occur, risking a drop of an additional 14% to reach the August 5 low of $0.08.
Further Reading: Top 10 Altcoin Exchanges for 2024
On the other hand, if demand increases, the coin could clear the resistance and aim for the three-month price high of $0.15.
Disclaimer
In accordance with the Trust Project guidelines, this price analysis piece is intended solely for informational purposes and should not be construed as financial or investment advice. BeInCrypto strives for accurate and unbiased reporting, but market conditions are subject to change without prior notice. Always perform your own research and seek assistance from a professional before making any financial decisions. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have been recently updated.
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