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Dogecoin (DOGE) Price Forecast: What to Expect as Miners Offload $24M in 40 Days

By:
Ibrahim Ajibade
Updated: Dec 31, 2023, 10:22 GMT+00:00

Dogecoin miners accelerated the selling spree this month, reducing their cumulative balances by $24 million in 40 days. Here's how DOGE price could react.

Dogecoin DOGE Price

In this article:

 Key Insights:

  • Dogecoin (DOGE) price hit a daily low of $0.089 on Saturday, Dec 30, down 17% from the monthly peak of $0.11 recorded on Dec 9. 
  • Dogecoin miners accelerated the selling spree this month, reducing their cumulative balances by 270 million over the last 40 days. 
  • The Bollinger Bands technical alignments reflect a dominant bearish sentiment across Dogecoin markets. 

Dogecoin (DOGE) price wobbled below the critical $0.09 support level multiple times this week sparking bearish concerns across the pioneer memecoin ecosystem. On-chain data trends over the past month suggest a growing negative sentiment among DOGE miners.  

Should Dogecoin holders anticipate more downside, or is a DOGE price rebound imminent? 

Dogecoin Miners’ Selling Spree Enters Second Month 

Dogecoin price has action has been negative over the last two weeks. Since rejecting at its 2023 peak of $0.11 on Dec 9, the pioneer memecoin price has declined my more than 17%, dropping as low as $0.089 on Dec 30. 

According to the on-chain data trail, the ongoing selling spree among Dogecoin miners and node validators appears to be a major driver behind the DOGE price downtrend. 

Looking at IntoTheBlock’s DOGE Miners Reserves chart below, the Dogecoin node validators held a cumulative balance of 4.64 billion DOGE in their wallets on Nov 21. But at press time on Dec 30, those balances now read just 4.37 billion. 

This effectively illustrates that the Dogecoin miners offloaded 270 million DOGE in the last 40 days. 

Dogecoin (DOGE) Miner Reserves vs. Price  Source: IntoTheBlock
Dogecoin (DOGE) Miner Reserves vs. Price  Source: IntoTheBlock

When valued at the current Dogecoin price of $0.09 the 270 million DOGE offloaded by the miners in the last 40-days is worth approximately $24 million. 

Miner Reserves is an on-chain metric that tracks the total number of coins held by recognized crypto mining firms and mining pools. 

Miners are major stakeholders within a Dogecoin blockchain ecosystem. They dedicate resources and equipment to secure the network in exchange for a block rewards paid out in units of DOGE, currently ~10,000 DOGE per block. 

Investors often interpret it as a bearish signal when miners begin offloading their rewards. Firstly, the introduction of fresh coins dilutes market supply, and puts downward pressure price. 

Unsurprisingly, DOGE price has racked up double-digit downsizing in the recent week.

But more worryingly, other stakeholders, including whales and retail investors could take it as in indication that the miners are growing less commited to securing the network and are less confident in the native coin’s short-term price prospects. 

Hence, Dogecoin runs the risk of further price downswings if the miners’ negative disposition persists in January 2024. 

DOGE Price Forecast: The $0.08 Support Could be at Risk 

From an on-chain analysis perspective, Dogecoin price could be at risk of a downswing below $0.08, if other stakeholders mirror the miners’ selling pressure. In addition to this critical on-chain signal, DOGE technical indicators also confirm this bearish outlook. 

At press time, Dogecoin is currently trading at $0.09. The Bollinger Bands indicators in the chart below illustrate that following a week-long volatility, DOGE price has now wobbled below the the 20-day Simple Moving Average (SMA) of $0.093.

In simple terms this bearish alignment means that on average, Dogecoin traders are currently willing to pay less than they would have offered 20 days ago.

Dogecoin (DOGE) Price Forecast | Source: TradingView
Dogecoin (DOGE) Price Forecast | Source: TradingView

However, for the bears to fully capitalize on this momentum swing, they must first break down the $0.088 support, as indicated by the lower Bollinger Band. 

On the downside, the bulls could wrestle control of the Dogecoin markets gain if the can stage a rebound above the $0.10 resistance. However, with the bearish miners selling spree still ongoing, this looks unlikely in the short-term.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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