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Dogecoin (DOGE) Price Rally Imminent as Funding Rates Grow 700%
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Dogecoin (DOGE) market data shows that after a week of tepid price action, bullish speculative traders are shows signs of initiating a breakout.
In this article:
Key Insights:
- Dogecoin (DOGE) price is just below the $0.08 territory, down 1.7% in the first week of February 2024,
- DOGE Funding rate is up 700% this week as speculative traders’ increase bullish bets.
- Whale Demand also remains on the rise, with $27 million fresh inflows recorded this week.
Dogecoin (DOGE) price is has consolidated within the narrow $0.082 to $0.078 range since the start of February. After a week of tepid price action bullish speculative traders are shows signs of initiating a breakout.
The broader memecoin sector has made a negative start to February 2024, with the likes of Shiba Inu (-4%), BONK (-9%) and PEPE (-5%) booking sizable losses between Jan 31 and Feb. 7.
Amid rising Funding rates and increased whale demand, can Dogecoin break the negative market trends and enter a recovery phase?
Speculative Traders Have Started Leaning Bullish
After a week of consolidation within the narrow $0.082 – $0.78 range, Dogecoin speculative trends are show conviction to initiate a price uptrend.
Santiment’s funding rate trend tracks changes in fees paid by speculative traders to maintain their positions in the derivatives market.
The chart below shows that the DOGE funding rate has been on the rise this week increased by 700% from 0.01% on Feb. 3 to 0.08% on Feb 7.
Positive funding rates means that long position holders are paying higher fees to short traders in expectation of booking higher profits when prices move up.
Hence, the rising DOGE Funding Rates this week suggest that, like whale investors, speculative traders are also leaning increasingly bullish this week.
Whale Investors Enter $27 million Buying Spree Despite Dogecoin Price Downtrend
In addition to the speculitve traders taking on a bullish stance, recent on-chain data trends also confirm that strategic whale investors are rapidly buying the dip.
Santiment’s supply by addresses metric monitors whale investors trading activity by monitoring real-time changes in large holder wallets. The chart below illustrates that whale wallets with balances between 10 million to 1 billion DOGE held a total of 44.75 billion DOGE coins in their wallets as of Jan 23.
But since then, they have acquired an additional 340 million DOGE, bringing their cumulative balances to 45.09 billion at press time on Feb 7.
At current prices, the newly-acquired coins are worth approximately $27 million. Such a significant increase in whale demand during a price downtrend signals that large investors are confident of an imminent recovery phase.
Howeve, it remains to be seen if the Dogecoin bulls have enough in the tank to stage a decisive attempt to reclaim the $0.1 area.
Dogecoin Price Forecast: The $0.085 Resistance Looms Large
Drawing inferences from the market trends analyzed above, the whales buying trend and rising Funding rates signal conviction of an imminent rebound phase in both the Dogecoin spot and derivative markets.
These key factors could put Dogecoin price on the front foot, possibly retesting the $0.01 area in the days ahead. However, the bulls could face major resistance around $0.085 as depicted below by the upper-Bollinger band technical indicator.
However, a decisive breakout above that area, could open the doors to a bullish rally toward $0.10 as predicted.
On the flip side, there’s a chance the bears could negate this narrative if the DOGE price tumbles below $0.07 for the first time in 2024. However, as depicted by the lower Bollinger band, the buy-wall at $0.075 could offer significant support.
About the Author
Ibrahim Ajibadeauthor
Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.
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