Dogecoin (DOGE) bulls have fiercely defended the $0.065 support level as the memecoin markets continue to tumble this week. After booking profits for several weeks, on-chain data reveals Dogecoin miners are now eyeing another price rally.
With 4.37 billion coins currently in their reserves, Dogecoin miners control approximately 3.1% of the total DOGE in circulation. On-chain data analysis examines how their recent accumulation patterns could impact DOGE prices in the coming weeks.
Dogecoin Miners Return to Accumulation Mode
Dogecoin rallied to a 3-month peak of $0.082 around July 25. On-chain data reveals that many Dogecoin miners took advantage of those high prices to book profits.
However, as the memecoin prices retraced below the critical $0.07 support level, they have started returning to accumulation mode this week.
The IntoTheBlock chart below illustrates the miners began to wind down their recent sell-off frenzy once DOGE prices slid below $0.075 around August 8.
And between August 8 and 17, they accumulated another 80 million coins worth approximately $5.3 million.
The Miners Reserves data tracks the real-time changes in the wallet balances of recognized miners and mining pools. When it increases, miners accumulate more block rewards, presumably to position for another price rally.
Currently, the Miners control over 3% of the total DOGE circulation supply. Hence, it is unsurprising that their recent sell-off correlated closely to the ongoing DOGE price correction.
With fewer block rewards now flowing into exchanges, the resulting drop in market supply could propel DOGE into another rally.
Industry Headwinds are Driving the Ongoing Retracement
Since August 8, the global altcoin market has contracted by a staggering 5%. It appears that the industry-wide headwinds have negatively impacted DOGE prices in recent weeks.
The chart below shows that while the DOGE price dropped by more than 10% between August 6 and August 17, Dogecoin Transaction Activity has increased from 92,960 daily transactions to 578,860 during that period. This represents a six-fold increase in transactional activity.
The daily Number of Transactions provides insights into how much a blockchain network is currently utilized for economic activity. When transactional activity rises during a price downtrend, it indicates that external factors could be responsible for the retracement.
Since Dogecoin has not experienced a significant deterioration in transactional activity, it could promptly enter another price rally once the industry’s bearish tide subsides.
In summary, the miners’ accumulation and transactional activity growth is vital on-chain indicators that could propel DOGE price in the coming weeks
DOGE Price Prediction: Consolidation Above $0.06
Drawing inferences from the abovementioned on-chain stats, the DOGE price will likely consolidate around the $0.06 territory amid industry-wide bearish headwinds.
The In/Out of Money Around Price (IOMAP) data, which shows the purchase price distribution of current holders, also validates this premise.
The chart below shows that 44,000 addresses had bought 1.18 billion DOGE coins at an average price of $0.065. If the miners accumulate and transaction activity remains high, DOGE could experience significant support at that range.
However, if that support level cannot hold, the bulls could mount another significant buy-wall at $0.059.
In contrast, the bullish miners could spearhead another rally toward $0.08. But in that case, the 206,950 addresses that had bought 24.45 billion DOGE at an average price of $0.075 could trigger a pullback.
However, if the industry-wide headwinds cool off, the DOGE price could smash that resistance and head toward $0.080 once again.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.