February Sees a Surge in News Headlines
Dogecoin and Shiba Inu, the two largest meme coins, had similar performance in January, both experiencing a 17% drop in value by January 26th. Positive speculation surrounding the proposed XPayments platform drove both communities, but as the broader crypto market faced bearish pressure, these mega-cap memecoins also suffered. It’s worth noting that Dogecoin miners’ recent trading activity may cause the price of DOGE to fall behind SHIB in the coming weeks.
Dogecoin and Shiba Inu have market capitalizations of $11.4 billion and $5.3 billion, respectively, making them the largest meme coins. Since their inception, the fortunes of both ecosystems have been closely linked. In January 2024, both DOGE and SHIB had almost identical price performances, with a 17% decline in value by January 26th, as shown in the chart above.
However, the current trading disposition of Dogecoin miners may cause the price correlation to diverge from SHIB in February.
In Q4 2023, Dogecoin experienced double-digit price gains as the crypto markets rallied due to positive sentiment surrounding the approval of a Bitcoin spot ETF. However, on-chain data reveals that Dogecoin miners took advantage of the market rally to book profits. The miners’ reserves chart by IntoTheBlock shows that they held 4.6 billion DOGE in cumulative balances on November 21st, but by January 26th, the balances had dropped to 4.3 billion DOGE. This means that the miners have offloaded approximately $22.6 million worth of 290 million DOGE in the last three months.
Miners play a significant role in any proof of work cryptocurrency ecosystem, as they validate transactions in exchange for block rewards. When miners sell their coins, it is seen as a bearish signal for the asset. The increased selling pressure from miners dilutes the market supply and puts downward pressure on the price. With market demand weakening, the miners’ selling trend could have a more significant impact on the price of DOGE in February 2024, potentially allowing SHIB to surpass it.
If DOGE loses the $0.007 support level, it could trigger more significant losses. The recent bearish price action in the crypto market suggests that bears may gain more ground in the coming weeks. However, if the initial support buy-wall around $0.07 holds, the bearish trend could be overturned if current Dogecoin holders make frantic purchases to defend their positions. On the other hand, if the $0.07 support level is broken, it could lead to a retest of $0.06.
In terms of price forecast, if DOGE can move above the $0.10 area, the bulls may regain momentum. However, in the short term, the 786,930 addresses that acquired 14.1 billion DOGE at an average price of $0.095 could pose significant resistance.
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