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DOGE Might Add 5th Red Monthly Candle, But Here's Another Reason This Is Bullish: Details

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Sat, 03/12/2022 - 14:20
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Tomiwabold Olajide
Dogecoin approaches crucial support level where turnaround might be possible
DOGE Might Add 5th Red Monthly Candle, But Here's Another Reason This Is Bullish: Details
Cover image via stock.adobe.com

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For the fifth month in a row, a red candle appears to be forming for Dogecoin (DOGE), which is currently trading around $0.11 and marking a continuation of the bearish streak for the largest meme token.

A red candle implies that the price is trading lower than the opening price recorded at the start of the month. This happened four months in a row in the case of Dogecoin, and it appears to be on track for a fifth one.

TradingView Charts
DOGE/USD Monthly Chart, Image Credit: TradingView

Dogecoin has been on a downward trend since May 2021 when it rose to all-time highs of $0.76. The price slightly recovered and consolidated, as seen by the two monthly green candles marked in August and November 2021 before another round of declines.

Starting from May 2021, Dogecoin has only marked two green candles out of eleven monthly candles, in comparison to the long streak of greenish candles recorded before that time.

On the monthly timeframe, Dogecoin is approaching a crucial support level at which a turnaround might be possible. The RSI indicator alludes to this, though hinting at further consolidation before a major price run. At press time, the price of Dogecoin is $0.114, marginally down over the last 24 hours.

Dogecoin accumulation continues: a positive sign

Dogecoin's top holders appear to be scooping up tokens at a discount amid the present market volatility concerning the short-term price action for cryptocurrencies. It might be worth noting that every market cycle has an accumulation phase, during which prices flatten and contrarian investors see an opportunity to buy at a discount.

WhaleStats
Top 100 Dogecoin Holders, Courtesy: WhaleStats

When this market cycle is finished, the next one, the ''Mark-Up Phase,'' begins. This refers to a phase in which the market has been stable for a while and is beginning to move higher.

Over the last 24 hours, the top 100 Dogecoin holders have increased their portfolios, as WhaleStats reports a 987.76% rise in the average DOGE balance of this category of investor. The average DOGE value of their portfolio has also grown by 929.33%.

Dogecoin profitability, as per IntoTheBlock data, remains at 53%. More addresses in the money are expected to be beneficial to the network because holders are less inclined to sell to break even on their positions.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.