In a period of persistent price stagnation, Dogecoin miners have been gradually reducing their block rewards, raising concerns about the cryptocurrency’s price trajectory in October. This article examines the recent behavior of Dogecoin miners, the reduced trading activity of whale investors, and the potential implications for Dogecoin’s price movement.

Dogecoin Miners Offload 350 Million Coins in Three Months

After a brief accumulation phase in mid-September, Dogecoin miners have resumed selling off their holdings as prices continue to remain stagnant. Over the past three months, miners have consistently reduced their balances.

On July 11, Dogecoin miners collectively held a substantial 4.7 billion DOGE in their wallets. However, this figure has dwindled to just 4.35 billion DOGE as of September 28. This translates to a significant reduction of 350 million coins within a span of three months.

Miners Reserves closely monitors deposit balances in wallet addresses associated with recognized Dogecoin miners and mining pools. When evaluated against the current market price of $0.061 per DOGE, the sale of 350 million DOGE translates to miners offloading coins worth approximately $21.5 million since July 11.

It’s worth noting that miners control approximately 3.08% of the total circulating supply of DOGE. Consequently, if they continue their selling trend into October, they could exert substantial downward pressure on Dogecoin’s price.

Whale Investors Show Reduced Trading Activity

On-chain data also indicates that Dogecoin’s whale investors, who hold significant amounts of the cryptocurrency, have scaled back their trading activity in recent times. This reduction in trading activity aligns with the bearish sentiment surrounding Dogecoin’s price.

The chart below illustrates this trend: Dogecoin attracted 819 unique Large Transactions at its recent peak on July 25. However, this number has steadily declined, with the network recording just 79 whale transactions on September 28.

The Adjusted Large Transactions metric aggregates the total value of confirmed trades exceeding $100,000 on a given trading day, while excluding amounts returned to their original addresses. A decrease in the number of unique whale transactions typically signals bearish sentiment for an asset’s price. It suggests lower market liquidity, making it more challenging for market participants to execute trades efficiently.

Factors Potentially Driving Down Dogecoin Prices in October 2023 and Beyond

Several factors, including miners flooding the market with coins and the downtrend in whale transactions, could contribute to a decline in Dogecoin prices in the coming months.

DOGE Price Prediction: $0.05 Support at Risk

The absence of significant price movement in Dogecoin could lead to a prolonged bearish reversal, potentially dropping below the $0.05 support level in the weeks ahead. Supporting this outlook is the In/Out of Money Around Price data, which provides insights into the entry price distribution of current DOGE holders.

This data indicates that 441,640 DOGE holders have acquired a substantial 6.22 billion coins at the highest price of $0.59. If these holders choose to defend their long positions, it could potentially prevent a bearish downturn for Dogecoin.

However, if miners persist in selling their holdings, Dogecoin’s price may eventually dip below the $0.05 support level, in line with the bearish prediction.

Potential for Bullish Reversal

On the flip side, bullish investors may invalidate the pessimistic Dogecoin price prediction by reclaiming the $0.07 price point. A total of 456,140 wallet addresses have purchased 1.67 billion DOGE at an average price of $0.06. Should miners continue their selling activities, this resistance level could prove to be a formidable challenge for Dogecoin bulls.

While it appears unlikely given the current on-chain dynamics, the possibility of DOGE reaching $0.07 remains if this resistance level is breached.

In conclusion, the behavior of Dogecoin miners and whale investors, coupled with the prevailing market conditions, have raised questions about the cryptocurrency’s price trajectory in October and beyond. Traders and enthusiasts alike are closely monitoring these factors as they seek insights into the future of Dogecoin’s value.