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Dogecoin Drops 12% In Five Days, Whales Accumulate 1 Billion DOGE

Coin WorldFriday, May 16, 2025 10:07 pm ET

1min read

Dogecoin has experienced a decline over the past five days, dropping from $0.25 to $0.22. This downward trend has sparked discussions among analysts about whether the cryptocurrency has reached a local top. However, recent on-chain metrics suggest a different narrative.

Despite the recent pullback, key indicators point to a bullish mid-term potential for Dogecoin. One significant factor is the accumulation of over 1 billion DOGE by whales in the past month. This level of accumulation typically occurs when prices are perceived as undervalued, indicating that large investors are confident in the cryptocurrency's future performance.

Analysts have noted that the current market conditions are characterized by high retail participation in futures trading, which historically has been a sign of market overheating. However, the Funding Rate across various exchanges shows that most market participants are taking long positions, suggesting a generally optimistic outlook among investors.

According to AMBCrypto’s analysis, Dogecoin is currently undervalued and has more room for growth. The MVRV Ratio, which historically signals tops around 3.5 to 5, is currently at 1.03, indicating that the market is barely in profit. This lack of incentive to sell, combined with the fact that long-term holders are sitting on unrealized losses, creates a dynamic where short-term profit-taking is absorbed, setting the stage for a potential recovery.

The MVRV Long/Short Difference has plunged to -39.83%, indicating that long-term holders are underwater. When this happens, they tend to stay put, further absorbing pressure from short-term profit-taking. This dynamic, along with the aggressive buying by large wallets, suggests that Dogecoin may revisit $0.24 in the short term if accumulation continues and retail exposure eases.

In summary, while Dogecoin has experienced a recent decline, on-chain metrics and whale activity suggest a bullish outlook for the cryptocurrency. The current market conditions, characterized by high retail participation and long positions, indicate that investors are optimistic about Dogecoin's future performance. The accumulation of over 1 billion DOGE by whales and the undervalued status of the cryptocurrency further support this bullish outlook. If these trends continue, Dogecoin may see a recovery in the short term.

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