Dogecoin has shown a remarkable recovery over the past five days after a significant decline caused by a broader market sell-off. In the first five days of August, the cryptocurrency experienced a sharp declinecrashed by 38%, falling from $0.1348 to a low of $0.0831. However, DOGE has shown resilience in the face of these challenges. After hitting the $0.0831 mark, the cryptocurrency began a remarkable comeback.
In the last five days DOGE has recovered by about 25%, a recovery that has lifted the price significantly from its recent lows. Although this upward movement was not yet enough for holders to fully recoup the losses from earlier in the month, it does show the return of positive momentum for DOGE.
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This partial price recovery has been accompanied by a recovery in key market indicators, suggesting that investor sentiment towards Dogecoin is turning bullish again. Trading volumes have increased, indicating renewed interest and participation in the market.
Key Dogecoin metrics provide bullish signals
Accordingly Data from IntoTheBlockThis recovery has been accompanied by an increase in daily trading volume, with most of them being accumulations that have increased buying pressure. At the time of writing, the large transaction volume for DOGE in USD terms stands at an impressive $1.01 billion, a significant 54% increase from the seven-day low of $654.96 million recorded on August 3, just before the sharp decline began.
Interestingly, trading volume in large transactions peaked at $1.52 billion on August 5, coinciding with the start of the recovery. This correlation strongly suggests that large holders, often referred to as “whales,” have been actively participating in the DOGE market during this recovery phase and driving the upward momentum.
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Although the large volume metric does not show whether it is accumulation or sell-off, the ratio of large holder net inflows to exchange net inflows suggests the former is the case. This metric tracks the balance between large holder accumulation and exchange inflows, providing valuable insight into the behavior of both retail investors and whales. Currently, the ratio is trending towards large holder accumulation, sitting at 3.49%, up from negative 1.85% on Monday, August 5.
As for whale activity, IntoTheBlock’s Bulls and Bears metric suggests that the scales are slowly tipping towards the bulls’ side. This metric tracks addresses that have bought or sold more than 1% of the total trading volume in the past 24 hours, thus classifying them as bulls or bears, respectively. There has been a significant increase in bullish activity over the past two days, with 14 bulls compared to 13 bears in the past 24-hour period. While the difference may be small, the presence of more bulls than bears suggests that buying interest is gradually outweighing selling pressure.
At the time of writing, DOGE is trading at $0.1045. A successful breakout above $0.11 could reignite retail interest, which in turn contribute to an increase towards the much anticipated price level of $0.5.
Featured image from iStock, chart from Tradingview.com
