- Despite a certain transaction, DOGE’s price might fall in the short term
- Decreasing velocity suggested that the coin might climb towards $0.25 in a few months
According to blockchain tracker Whale Alert, a market participant sent 100 million Dogecoin [DOGE] from Robinhood to an unidentified wallet. At the time of the transfer, the coins were worth $15.25 million, sparking speculation that the price could hike soon.
Robinhood is a trading platform where users can exchange their cryptocurrencies for fiat. In most cases, inflows into the platform come with a motive to sell. However, since the coins went out to a non-exchange wallet, it is possible that the intention is to hold for some time. When something like this happens, the cryptocurrency’s price jumps or consolidates on the charts.
A little decline before the hike?
For Dogecoin, AMBCrypto cannot yet confirm what the end result could be. However, it seemed that the decision may be to prepare for the post-Bitcoin [BTC] halving price performance.
Historically, prices of memecoins like Dogecoin have surged to astronomical values months after the halving. At press time, DOGE was clinging to $0.15, representing a 4.64% hike within just 24 hours.
However, on-chain data from Santiment showed that the uptick might not last. This, because of the trend displayed by the one-day circulation. At the time of writing, Dogecoin’s circulation had risen to 1.07 billion. The hike implied that more coins are being used, with fewer ones taken off the market.
If the metric continues to climb, then DOGE’s value might fall. On the contrary, the coin’s velocity flashed a different signal, with the same having a value of 1.49.
Source: Santiment
Bitcoin pours more into DOGE
A high velocity for a cryptocurrency indicates solid economic activity. In this instance, holders are spending a lot of their coins. However, a decrease, like in DOGE’s situation, suggests a reluctance to spend.
In the short-term, a rising circulation might draw DOGE below $0.15. However, if the velocity remains low in the coming months, DOGE’s price could rally and targets between $0.20 and $0.25 could be plausible.
AMBCrypto also assessed Dogecoin’s correlation with Bitcoin. This was done to check if DOGE’s price might follow BTC’s direction over the next few weeks.
According to data from Macroaxis, the 90-day correlation coefficient between both cryptocurrencies is 0.94. This metric ranges from -1 to +1. A value close to -1 shows almost no correlation while the other shows strong similar movement.
Source: Macroaxis
Despite the correlation, DOGE would have generated 1.66 times more than BTC if you invested the same amount in the last three months.
Realistic or not, here’s DOGE’s market cap in BTC terms
Moving on, this might not change. As such, if Bitcoin’s price tumbles, Dogecoin could plunge harder. On the other hand, a significant increase in Bitcoin’s value could stir a mind-blogging rally for DOGE like the one last seen in March.
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