Dogecoin Whale Distribution Increases as DOGE Price Nears 40% Crash Setup

Dogecoin (DOGE), the leading memecoin by market capitalization, is showing signs of a potential major price decline in the coming months. This trend is further fueled by what appears to be a growing selling sentiment among its richest investors. Let’s delve into these factors in detail.

DOGE Whale Supply is Declining

As of June 17, the total Dogecoin supply held by its richest whale cohort—entities holding at least 1 billion DOGE tokens (gray)—was 47.54%, down from 48.72% two days ago. At its best in 2024, this cohort had control over 50% of the total Dogecoin circulation supply in February.

This decline coincides with a notable increase in the supply held by the 100 million—1 billion DOGE balance cohort (teal). This shift in the balance indicates that the Dogecoin sold or redistributed by the largest whales is being accumulated by mid-sized holders.

However, the DOGE price has declined by nearly 2.5% in the same period, implying a lower demand for the Dogecoin supply unleashed by the 1 billion—infinity DOGE balance cohort.

On the positive side, redistributing Dogecoin from a few large holders to a larger number of mid-sized holders can increase market stability.

DOGE Nears Inverse Cup and Handle Breakdown

The whale distribution is accelerating at a time when the DOGE price is testing the neckline of its inverse cup and handle pattern for a potential breakdown move.

For the unversed: an inverse cup and handle pattern begins with a price rise followed by a rounded top formation, resembling an upside-down “U” shape, which forms the “cup.” After this, a short upward consolidation or slight rally forms the “handle”

Meanwhile, the pattern resolves when the price breaks above its neckline support and falls by as much as the maximum distance between the cup’s peak and the neckline.

As of June 17, DOGE’s price was eyeing the breakdown below the inverse cup and handle pattern’s neckline, with its downside target at around $0.075, about 40% from the current price level.

Conversely, the pattern will stand invalidated if the Dogecoin price bounces from the neckline support, aligning with another support in the form of the 200-day exponential moving average (200-day EMA; the blue wave). Should that happen, DOGE’s immediate upside target will likely be around its 50-day EMA (the red wave) at around $0.151, up 15% from the current price levels.