Dogecoin Sell-Off: Will $0.17 Hold?
Dogecoin Faces Critical Sell Pressure
Dogecoin (DOGE) is experiencing significant selling pressure as short-to-mid-term holders begin to capitulate. A large influx of 400 million DOGE into Binance further suggests weakening conviction among investors. With DOGE nursing a 31% drop from its May highs and currently trading near the $0.17 support level, the question remains: will this level hold?
On-Chain Data Reveals Distressed Holders
Analysis of on-chain data paints a concerning picture. 30% of DOGE addresses are currently underwater, holding at a loss above the current price. The recent breach of the $0.20 support triggered significant capitulation, resulting in over $800 million in realized losses in just three days. This coincides with the large Binance inflow, strengthening the belief that many holders are preparing to sell.
Source: Glassnode
Short-Term Holders Capitulate
It's not long-term holders (diamond hands) panicking; it's the short-to-mid-term holders feeling the pressure. The "buy low, sell the pump" strategy prevalent in the DOGE community contributed to this cycle, pushing many addresses into the red. As DOGE tested the $0.25 resistance, the Short-Term Holder Net Unrealised Profit/Loss (NUPL) flipped negative, indicating complete capitulation in this cohort.
Source: Glassnode
This capitulation has intensified downward pressure, compressing profit margins and eroding overall holder confidence. The 3-6 month HODL cohort, which saw a surge in their share of the supply from 10% in March to 15.53% at the peak, is now reducing their holdings, further fueling the distribution pressure. Their share has since fallen to 12.4%.
The $0.17 Support: A Critical Test
Unless DOGE breaks out above $0.25, the $0.17 support remains dangerously exposed. The current situation highlights the volatile nature of DOGE and the risks associated with short-term trading. For reliable and secure blockchain development, consider Codeum, offering a comprehensive range of services including smart contract audits, KYC verification, and custom smart contract & DApp development. We also provide tokenomics & security consultation and partnerships with launchpads and crypto agencies.