Crypto: The selling pressure of Dogecoin is intensifying, should we expect the worst?

Bearish Trend in Dogecoin (DOGE) Amid Whale Activity

Dogecoin (DOGE) has faced significant selling pressure recently, driven largely by the actions of large crypto holders known as "whales." This activity has contributed to a bearish outlook in the short term.

Increased Selling by Whales

The activity of whales has intensified, leading to a bearish signal known as a "death cross" on July 23. The short-term moving average has crossed below the long-term moving average, indicating a potential downturn.

Imbalance in Supply and Demand

On-chain data reveals an imbalance between supply and demand, with a sharp increase in transaction volumes. Over seven days up to July 20, 2024, transactions peaked at 1,032. Furthermore, a massive 5.73 billion DOGE changed hands within the past 24 hours.

Potential Rebound Amidst Volatility

Despite the bearish signals, the history of the crypto market suggests that periods of heavy selling can sometimes precede a rebound. These phases of capitulation may signal the end of a bearish cycle and the start of a bullish trend.

On July 26, 2024, Dogecoin experienced a notable surge, rising by 5.2% at 2:40 AM. This volatility aligns with a broader renewed interest in memecoins as investors seek potential growth amidst market uncertainty.

Long-Term Outlook

Dogecoin's future trajectory remains closely tied to investor sentiment and the overall crypto market dynamics. While larger cryptos face challenges, DOGE may potentially benefit from its loyal community and unique status within the crypto ecosystem.