- On-chain data showed that a rise in DOGE price is usually followed by a fall in BTC price
- Analysts noted that BTC could see another price drop
While the youngest jump at Dogecoins [DOGE] The price could bode well for its holders, its rally could spell doom for the price of the leading coin Bitcoin [BTC].
According to cryptocurrency price tracking platform CoinMarketCap, the price of the memecoin is up 37% in the last week. This puts DOGE at the top of all other cryptocurrencies as the asset with the greatest growth over the past seven days.
Read Dogecoins [DOGE] Price forecast 2022-2023
According to Santiment, a surge in DOGE price is a “reliable reflection of crowd euphoria,” and major memecoin price spikes can be “useful in predicting upcoming #bitcoin drops.” In 2021, on-chain data showed that whenever DOGE’s price rose, a corresponding fall in BTC price followed.
Source: Santiment
So, is the king coin primed for another fall?
Increased bitcoin accumulation
As the general cryptocurrency market recovered from the sudden impact of cryptocurrency exchange FTX, data from Santiment showed steady growth in whale accumulation. Additionally, the unexpected collapse of FTX caused BTC addresses holding 10 to 10,000 BTC to give up 1.36% of the coin’s total supply for the first three weeks of this month.
However, as the market cooled after FTX’s demise, this cohort of BTC holders resumed their coin accumulation. According to data from Santiment, holders of 10 to 10,000 BTC have accumulated over 47,000 BTC in the past five days. This accounted for over 0.24% of the previously dumped 1.36%.
Source: Santiment
A look at BTC’s performance on the daily chart showed that the king coin started a new bull cycle on November 23. The Moving Average Convergence Divergence (MACD) line crossed with the trend line and the price has since gained 2%. Additionally, BTC’s Chaikin Money Flow (CMF) dynamic line (green) was spotted at 0.06, indicating rising coin accumulation.
Source: TradingView
Hold your horses
While the past few weeks have been marked by increased coin accumulation (which is usually a harbinger of a price rally), a CryptoQuant analyst believes the king coin could see another price drop.
BTC formed a downward sloping pennant pattern on Nov. 27, according to analyst ghoddusifar. He believed that this pattern, while not common, “is usually associated with downtrend continuation.” As a result, Ghoddusifar advised investors to wait for a breakout before making trading decisions.
Source: CryptoQuant
Ghoddusifar further noted that during BTC’s last bearish cycle, the price decline stopped in December 2018 when the coin hit the previous cycle’s stock-to-flow level. He explained:
“In fact, the previous Stock to Flow acted as the support and target level for Bitcoin back then. Once again, Bitcoin is approaching the stock-to-flow price of the previous cycle. It’s possible that this price (which sits around $8,000-$11,800) will serve as Bitcoin’s target and return point (as it did in the previous cycle).”
Source: CryptoQuant
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