Dogecoin and Shiba Inu recorded identical price performance in January, with the two largest meme coins down 17% as of January 26.
Positive speculation around the proposed
Notably, the recent trading activity of Dogecoin miners may lead to DOGE prices falling behind SHIB in the coming weeks.
DOGE and SHIB posted identical performances in January
With a market cap 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 intertwined from the beginning.
In January 2024, DOGE and SHIB recorded strikingly identical price performance. The chart above shows that both assets fell by 17% in value during the month as of January 26.
However, the current trading behavior of Dogecoin miners could see the price correlation break from SHIB in February.
Dogecoin miners unloaded $22 million worth of DOGE in 3 months
Dogecoin posted double-digit price gains in Q4 2023 as cryptocurrency markets soared on positive sentiment surrounding the approval of a spot Bitcoin ETF. However, as investors buy into the hype, on-chain data reveals that Dogecoin miners have taken advantage of the cryptocurrency market's rise to make profits.
IntoTheBlock's Miner Reserves Chart tracks real-time balances held by recognized mining companies and mining pools.
Dogecoin miners held 4.6 billion DOGE in cumulative balances as of November 21, during the peak of the cryptocurrency market bull. But as of January 26, balances dropped to 4.3 billion doge.
This means that miners have offloaded 290 million DOGE worth approximately $22.6 million in the past three months.
Miners are key stakeholders in any Proof of Work (PoF) cryptocurrency ecosystem. They allocate computing resources to validating transactions in exchange for block rewards denominated in the local currency.
A selling trend is interpreted as a bearish signal for the underlying asset. When miners unload more newly mined DOGE coins, it dilutes the market supply and increases downward pressure on the price.
With weak market demand, the selling trend of miners could have a more pronounced impact on the price of DOGE in February 2024, opening the door to the possibility of SHIB overtaking the leading memecoin.
DOGE Price Forecast: Missing the $0.007 support could lead to greater losses
Like the rest of the cryptocurrency market, DOGE price suffered a significant bearish price movement in the past month. However, based on conclusions from the miners' selling trend at $22.6 analyzed above, the bears appear poised to gain more ground in the coming weeks. The bears must expand the initial support wall at $0.07 to validate this forecast.
IntoTheBlock's Global in/out of the money (GIOM) data aggregates current DOGE holder portfolios according to their historical entry prices.
The tool shows that 528,180 addresses received 45.6 billion DOGE at an average price of $0.071. Notably, this is the largest group of current Dogecoin holders. They can reverse the downtrend if they make frenzied buying to defend their positions.
However, a break below the $0.07 support level could trigger margin call triggers and open the doors to a retest of $0.06.
On the upside, the bulls can regain momentum if DOGE price can move above the $0.10 region. But in the short term, the 786,930 addresses that received 14.1 billion DOGE at an average price of $0.095 could constitute significant resistance.
