Dogecoin’s price performance in recent weeks has been uninspiring. In an altcoin market that has been suffering heavy losses, the memecoin sector was one of the worst-performing.
The total altcoin market cap (excluding Ethereum) has shrunk 28.46% within the past two months. The memecoin market cap has fallen by 50% in the same period.
Dogecoin [DOGE] was also down by 49%. This deep price drop has led to analysts pointing out how the next DOGE run could blindside the market.
Source: X
Perhaps the cup and handle pattern would come to fruition. The performance over the past year did not match previous cycles. This has led to calls that a similarly-sized rally is yet to occur.
Do the onchain metrics agree? Is there enough demand to spark a recovery?
Dissecting investor confidence in DOGE
Source: Glassnode
For the first time in over a month, the Hodler Net Position Change metric turned green.
That shift showed long-term investors accumulated DOGE again. Red bars through most of November reflected profit-taking and exits.
Source: CryptoQuant
During this time, whale buy orders in Spot markets have also increased.
The Spot Average Order Size metric showed whale order numbers were rising, especially over the past two weeks. This agreed with the idea of accumulation.
Supply pressure still weighed
Source: Glassnode
However, it should be remembered that Dogecoin was in a strong downtrend.
The Percent Supply in Profit dropped to just 40.7% at the time of writing. This was lower than it had been in April.
Therefore, any price bounce would likely be met with high selling pressure from holders at a loss, trying to exit at or near breakeven.
Source: Glassnode
Speculative participation also weakened. Open Interest continued to decline and remained below April’s market-bottom levels.
That signaled fear dominated derivatives traders and that few were willing to take aggressive long positions.
Final Thoughts
- The Dogecoin drawdown to the support level from April, at $0.13, has led to some calls of a renewed DOGE rally.
- Onchain metrics showed that speculative interest and supply in profit were significantly down, indicative of bearish market sentiment.
