Dogecoin has seen a substantial surge in price, rising by around 70% this week, thanks to a bullish trend in the overall cryptocurrency market. This upward momentum indicates the potential for further gains in March, supported by a combination of technical and fundamental indicators.
The recent price surge in Dogecoin coincides with an increase in holdings among its wealthiest investors, known as “whales.” The number of addresses holding over 100,000 DOGE tokens has grown by 0.7% since the beginning of the year. However, the number of entities with over 1 million DOGE has slightly decreased since February 12.
These addresses with significant holdings likely belong to exchanges, suggesting that traders are choosing to hold onto their DOGE rather than actively trade it. This behavior indicates a strong accumulation of the cryptocurrency.
The surge in Dogecoin’s price comes ahead of the fourth Bitcoin halving, scheduled for April 19, 2024. This price rally is reminiscent of previous upside moves before Bitcoin halving events in May 2020 and July 2016. Notably, DOGE’s price surged by 200% before the first Bitcoin halving and around 50% before the second.
Traders often turn to alternative investments like memecoins, such as Dogecoin, in anticipation of higher short-term gains, believing that the halving will boost the overall market. This behavior is driven by speculation and the desire to capitalize on increased market activity resulting from Bitcoin’s supply shock.
Other popular memecoins like Shiba Inu, Pepe, and Bonk have also experienced significant gains leading up to the Bitcoin halving.
From a technical analysis perspective, DOGE’s next target for an upward move is at its 0.236 Fibonacci retracement line. This price level played a crucial role as a support during the downtrend from May 2021 to November 2021 and has since become a strong resistance level.
Heading into March 2024, Dogecoin has the potential to increase by 25% and reach $0.18. This optimistic trend is fueled by a strong buying sentiment within the memecoin market, driven by Bitcoin’s recent surge. If this trend continues, Dogecoin may achieve its target by the end of the month.
It’s important to note that this article does not provide investment advice or recommendations. Investing and trading always involve risks, and readers should conduct their own research before making any decisions.