Dogecoin and Shiba Inu have posted identical price performance in January, with the two largest memes coins shedding 17% as of Jan. 26.
Positive speculations about a proposed XPayments platform were a major driver for both Shiba Inu (SHIB) & Dogecoin (DOGE) communities during the month, but as bearish headwinds swept across the broader crypto market, the mega-cap memecoins also succumbed to downward pressure.
DOGE and SHIB posted identical performance in January
With a market capitalization of $11.4 billion and $5.3 billion respectively, Dogecoin and Shiba Inu are the two largest memecoins. The fortunes of both ecosystems have remained closely interlinked since inception.
In January 2024, DOGE and SHIB posted strikingly identical price performances. The chart above illustrates that both assets shed 17% in value during the month as of Jan. 26.
However, Dogecoin miners’ current trading disposition could see the price correlation decouple from SHIB in February.
Dogecoin miners offload DOGE worth $22m in 3 months
Dogecoin recorded double-digit price gains in Q4 2023 as the crypto markets rallied on positive sentiment surrounding the Bitcoin spot ETF approval. However, as investors bought in on the hype, on-chain data reveals that Dogecoin miners had capitalized on the crypto market rally to book profits.
IntoTheBlock’s miners’ reserves chart tracks the real-time balances in the custody of recognized mining companies and mining pools.
Dogecoin miners held 4.6 billion DOGE in the cumulative balances as of Nov. 21, during the heat of the crypto market rally. But as of Jan. 26, the balances have dropped to 4.3 billion DOGE.
This implies that the miners have offloaded 290 million DOGE worth approximately $22.6 million in the last three months.
Miners are major stakeholders within any proof of work (PoF) cryptocurrency ecosystem. They dedicate computing resources to validate transactions in exchange for block rewards denominated in the native coin.
A selling trend is interpreted as a bearish signal for the underlying asset. As the miners unload more newly mined DOGE coins, it dilutes market supply and increases downward pressure on the price.
With market demand weakening, the miners’ selling trend could have a more pronounced impact on DOGE price in February 2024, opening the door to SHIB potentially overtaking the pioneer memecoin.
DOGE price forecast: Losing the $0.007 support could trigger larger losses
Like the rest of the cryptocurrency market, DOGE price has endured significant bearish price action in the past month. However, drawing inferences from the miners’ $22.6 selling trend analyzed above, the bears look set to gain more ground in the coming weeks. Bears must scale the initial support buy-wall around $0.07 to validate this outlook.
IntoTheBlock’s Global in/out of the money (GIOM) data groups the current DOGE holder wallets according to their historical entry prices.
The tool depicts that 528,180 addresses had acquired 45.6 billion DOGE at the average price of $0.071. Notably, this is the largest cluster of current Dogecoin holders. They could overturn the bearish trend if they make frantic purchases to defend their positions.
However, a break below the $0.07 support level could set off margin call triggers and open the doors to a $0.06 retest.
On the upside, the bulls could regain the momentum if the DOGE price can move above the $0.10 area. But in the short-term, the 786,930 addresses that acquired 14.1 billion DOGE at the average price of $0.095 could pose a major resistance.