Dogecoin Volume Surges Over 190% Following Flash Crash: What’s Behind the Spike?
In the wake of the recent flash crash that shook the cryptocurrency market, Dogecoin has been struggling to recover. The popular meme coin lost its hold on the $0.09 mark and has since dropped back to the low $0.08 range. Surprisingly, this drop in price coincides with a significant increase in Dogecoin’s trading volume. So, what exactly is going on?
Over the past day, Dogecoin’s daily trading volume has experienced one of the largest spikes in recent memory. As interest in the coin escalated, so did its trading volume, resulting in a staggering 190% increase. According to CoinMarketCap, Dogecoin’s trading volume surged to over $1.12 billion in a single day. This equates to approximately 9% of the trading volume to market cap ratio, a positive sign for the asset.
Why Dogecoin Price Continues to Struggle Despite Rising Trading Volume
Despite the surge in trading volume, Dogecoin has yet to see any significant recovery. The price of the coin is still hovering around $0.082, and it has experienced a more than 10% decrease in price during the same time period. Furthermore, its weekly gains have been completely wiped out.
The reason for Dogecoin’s price stagnation appears to be the mounting sell pressure from large investors. These whales, who hold substantial amounts of Dogecoin, have been offloading their holdings. In a recent transaction reported by the on-chain whale tracker Whale Alert, 300 million DOGE, worth over $29.6 million, was sent to the Binance exchange. Such transactions can put significant sell pressure on the price of a cryptocurrency, effectively keeping it down.
Large Investors Selling Off Dogecoin: A Possible Reason for Price Decline
Multiple large transactions of Dogecoin have been observed heading to various exchanges over the past day. For example, Whale Alert flagged an initial transaction of 82 million DOGE, valued at $6.74 million, heading for the Robinhood trading platform. An hour later, another large transaction of 102.27 million DOGE, worth $8.4 million, was also flagged heading to Robinhood. These transactions suggest that large investors may be selling off their Dogecoin holdings, which could explain the coin’s struggle to recover despite a market-wide rebound.
Bearish Sign for Dogecoin? Large Transactions Headed for Exchanges
Sending coins to exchanges is often seen as a bearish signal for a cryptocurrency’s price. This is because it implies that the holder intends to sell their coins. When a significant volume of Dogecoin is sent to exchanges for the purpose of selling, it can exert downward pressure on the price, hindering any potential recovery.
Not All Signs Are Bearish: A Bullish Transaction Found Amidst Selling Pressure
Amidst the selling pressure from large investors, there have been some bullish signs for Dogecoin as well. One transaction reported by Whale Alert involved the transfer of over 151.68 million DOGE, valued at $12.49 million, from Robinhood to an unknown wallet. This type of transaction suggests that the owner may be moving their coins to a private wallet with the intention of holding them for better prices.
While Dogecoin continues to face challenges in its recovery, the increase in trading volume indicates that there is still strong interest in the coin. However, the sell pressure from large investors may be keeping the price down. It remains to be seen how Dogecoin will navigate these challenges in the coming days.
Analyst comment
As an analyst, I would say that the news is mostly negative for Dogecoin. Despite a surge in trading volume, the price is struggling to recover and has even decreased. Large investors selling off their holdings is likely putting sell pressure on the coin, hindering its potential recovery. However, there is still interest in Dogecoin, as seen by the increase in trading volume. It remains uncertain how Dogecoin will overcome these challenges in the market.
