Is Dogecoin (DOGE) Price at Risk? Miners Make Surprise $25M Move

Insights:

• Dogecoin (DOGE) price entered a 5% correction on Tuesday as markets reacted to the latest US CPI and inflation report. 
• On-chain data trends reveal that DOGE Miners capitalized on the double-digit gains in the last 3 weeks to book profits on $25 million worth of reserve coins. 
• Technical indicators highlight key support areas that the bull must hold to avert a prolonged retracement. 

Dogecoin (DOGE) price entered a 5% correction on Tuesday as markets reacted to the latestUS CPI and inflation report. On-chain data trends reveal that DOGE Miners capitalized on the recent rally to offload some of their reserve coins at favorable prices. 

If the miners’ sell-off persists this week, where will DOGE price find support?

DOGE Miners Sold Off 240 Million Coins in 3 Weeks

Dogecoin price gained 20% in the first 10 days of December as crypto investors leaned heavy into the memecoin markets to amplify profits and diversify their portfolio. However, the pioneer memecoin entered 5% correction on Tuesday. 

Looking beyond the price charts, an in-depth analysis of Dogecoin on-chain data trends brings  the miners’ recent bearish trading activity to the fore. While DOGE price raced up the top gainer’s charts, Dogecoin miners spent the last three weeks offloading their reserves.

Looking at the IntoTheBlock chart below, the aggregate reserves in custody of Dogcoin miners stood at 4.64 billion DOGE as of Nov 21. But that figure has now dropped to 4.4 billion as of  Dec 13. 

This shows that Dogecoin miners have depleted their reserves by 240 million (~$25 millon) over the last 3 weeks, taking advantage of the price rally to cash out at the top. A prolonged selling  trend among miners often puts downward pressure on a cryptocurrency’s price for two major reasons. 

Firstly, when miners flood the market with newly mined coins, it dilutes market supply. And if it is not met with a commensurate increase in demand, it results in a price dip.

Secondly, when other stakeholders in the ecosystem observe that miners are selling, it could influence them to take on a cautious trading disposition. 

Unsurprisingly, following DOGE miners $25 million sell-off over the past 3 weeks, DOGE price had dipped to a 10-day low of $0.089 at press time on Dec 13.

Forecast: Can Dogecoin Price Stay Above $0.08?

Dogecoin price looks set to hold the $0.08 support level, as the long-term sentiment surrounding the broader crypto markets still remains largely positive. 

However, in the short-term, DOGE price could be in for further downswing if the miners’ bearish trading activity persists. If this bearish scenario plays out, Dogecoin bulls can regroup at the initial support level at the Simple Moving Average (SMA-20) price around $0.089. 

But if that support level gives way, the bears could send Dogecoin price spirally toward $0.07. 

On the other hand, if the crypto market flips bullish, the miners could stop selling. In this scenario, the bull could regain control of the Dogecoin markets if the can reclaim $0.10.

However, as depicted by the upper Bollinger Band in the chart above, the $0.105 area poses significant resistance.