Despite a significant surge in trading volume, Dogecoin price struggling to regain its footing after the recent crypto market flash crash. The meme coin, once comfortably sitting at $0.09, has been pushed back to the lower $0.08 range, where it remains as of this writing. This is happening even as trading volume for Dogecoin has seen a dramatic increase. So, what’s the story behind this?
The Enigma of Rising Volume and Falling Prices
Over the past day, Dogecoin’s daily trading volume has seen a significant spike, following a drop in its price. As the coin attracted more attention, the trading volume also increased, resulting in a whopping 190% rise in daily DOGE trading volume. According to CoinMarketCap, this surge in trading volume has pushed the figure to over $1.12 billion in a single day, equating to about 9% of a trading volume to market cap ratio – a promising sign for the asset.
However, despite this surge in interest, Dogecoin’s price is still languishing around $0.082 at the time of writing. It has also seen a more than 10% price drop in the same time frame, effectively wiping out its weekly gains.
Why is Dogecoin Price Struggling?
The primary reason for Dogecoin’s price stagnation appears to be increased sell pressure, particularly from large investors or ‘whales’. These whales, who hold substantial amounts of Dogecoin, seem to be offloading their holdings. This theory is supported by a transaction flagged by the on-chain whale tracker, Whale Alert, which reported a transfer of 300 million DOGE (worth just over $29.6 million) to the Binance exchange. Such transactions often indicate an intention to sell, which can exert significant downward pressure on the price.
Over the last day, multiple large Dogecoin transactions headed for exchanges have been flagged. An initial transaction of 82 million DOGE (worth $6.74 million) was flagged heading for the Robinhood trading platform. An hour later, another large transaction carrying 102.27 million DOGE (worth $8.4 million) was also flagged heading to Robinhood. If these transactions were indeed intended for sale, it could explain why Dogecoin’s price continues to struggle even as the market recovers.
Not All Transactions Are Bearish
However, not all transactions have been bearish. One transaction flagged by Whale Alert saw over 151.68 million DOGE (worth $12.49 million) moved from Robinhood to an unknown wallet. Such a transaction could suggest that the owner is moving the coins to a private wallet with the intention of holding onto them for better prices in the future.
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Start now using our tools for free.Disclaimer: This article is intended for educational purposes only and does not constitute investment advice. Investing carries risks, and readers are advised to conduct their own research before making any investment decisions. Any information provided here is to be used at the reader’s own risk.
