Dogecoin (DOGE), a representative meme coin, continues to fail to break out of the box range. DOGE has failed to break out of the major resistance line three times this month. Selling pressure is increasing.
This happened despite a recovery in the broader market and a decrease in selling activity by Doji traders. Why is this happening?
DOGE can't break through the resistance line... The reason is 'paper hand'
Dogecoin has been trading within a horizontal channel since August 4. The balance between buying and selling pressure has kept the price within the range for more than 30 days.
The upper line of this channel sets resistance at 11 cents, while the lower line provides support at 9 cents. Over the weekend, Doji made its third attempt to break above resistance, but failed due to increased selling pressure at that level.
Read more: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
Despite the improvement in the broader crypto market and the reduction in selling by Doji traders, this resistance remains in effect. In particular, Doji whales have been increasing their accumulation over the past month. Net inflows from large holders are increasing.
Large holders are addresses that hold more than 0.1% of the circulating supply. Net inflows to large holders of Dogecoin have increased by 179% over the past month, indicating a significant increase in accumulation by this group of holders.
However, Dogecoin’s horizontal price action has left retail traders unimpressed. Even as Doge whales have increased their accumulation, retail traders have sold off some of their holdings over the past month.
On-chain data shows that these traders’ balances have only decreased by 2%, but the problem is that these “paper hand” holders hold a significant portion of DOGE’s total supply. This difference is very important. Paper hand holders tend to sell easily at the slightest sign of trouble or even a small price drop. Even a small price change can eat away at DOGE’s overall upside momentum .
Doge Price Prediction: More Market Participants Need to Look Upward
For Dogecoin to successfully break above 11 cents , its market sentiment needs to improve to positive. The current weighted sentiment for this meme coin is -0.63 and has been negative since September 18.
This is because negative sentiment is driving most discussions about Dogecoin on social media, preventing its price from starting a clear uptrend.
If market sentiment improves and retail traders reduce selling, Doji could break above 11 cents and successfully retest this level, which would send prices up 25% to 13 cents.
Read more: Dogecoin (DOGE) Price Prediction 2024/2025/2030
However, if sentiment worsens and retail traders continue to sell, Dogecoin’s price will remain within the horizontal channel, invalidating the bullish outlook. In this scenario, it could fall below the support level and drop to 8 cents.
