Dogecoin (DOGE) On-Chain Trading Signals

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Contributor, Benzinga
September 1, 2022

Dogecoin was initially released in late 2013 and is one of the oldest cryptocurrencies. It was initially released as a meme coin, inspired by the popular “doge” meme. The token remained fairly stagnant until 2021 when it gained steam and reached new all-time highs. The spike in price was primarily attributed to celebrity endorsement, most notably Elon Musk. 

Many are wondering where the future will take the price of Dogecoin. Trading signals and technical analyses can help traders make educated guesses. These techniques involve looking at a variety of trading signals, ranging from volume to more obscure measures, such as social media presence. This practice can allow investors to see past the superficial and take a deeper dive into what is really influencing the price of the token. While this method is nowhere near perfect, it can be a useful tool for those looking to invest in crypto

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Dogecoin On-Chain Trading Signals Analysis

Holders Making Money at Current Prices

This metric is a measure of investors who are currently in profit for their investment. It measures the number of holders who bought the token below the current price. As of right now, about half of DOGE holders have profited from their investment, while the other half have broken even or lost money. 

These numbers show potential room for improvement for DOGE. The scale could tip in either direction.

Concentration by Large Holders

Another useful Dogecoin trading signal to look at is the amount of DOGE that is in the hands of large holders. Although definitions vary, large holders — whales — are investors who own more than 1% of the total supply. Other large investors own between 0.1% and 1% of the total supply. These types of holders currently make up around 66% of the circulating DOGE supply. 

Large holders can often have a much greater influence on the price than retail investors. Since DOGE is majority-owned by these large owners, any big moves by these owners could potentially have a substantial impact on the price. 

Price Correlation With Bitcoin

Bitcoin is the original and largest cryptocurrency. Because of this, it has more stability than other cryptocurrencies. The Price Correlation metric views the price of a token in relation to Bitcoin. If the token moves exactly with Bitcoin, then it has a correlation of 1. If it moves differently than Bitcoin, then the correlation is closer to 0.

DOGE has had a correlation of around 0.75 with Bitcoin over the past 30 days. It mostly moves with Bitcoin, with a few discrepancies. Interestingly, the correlation is lower than most altcoins because the influence of celebrity shout-outs and hype is more important for DOGE than other cryptos. Nevertheless, In terms of the future, DOGE may still move mostly with Bitcoin and the overall crypto markets. If the markets rebound heavily, there is a solid chance that DOGE goes with it. 

Holder’s Composition by Time Held

Taking a look at how long holders have had their tokens can provide valuable insight into the communities views on the token. If a majority of the holders have had the token for a long time, it could imply that the community is strong and believes in the project.

For DOGE, 65% of holders have held their tokens for over a year, which could be indicative of a strong community. However, it could also just be small amounts of DOGE in many wallets after the DOGE craze in 2021. Regardless, the statistic is interesting and could provide some insight into the thoughts of the DOGE community. 

Transactions Greater Than $100,000

Recently, DOGE has seen many large transactions greater than $100,000, probably because of a large number of DOGE whales. This activity makes up a good portion of the 7-day volume, so it may be worth investigating the nature of these transactions.

Transaction Demographics

The Transaction Demographics indicator is one of the more interesting Dogecoin trading signals that looks at the time at which transactions are taking place. In the case of DOGE, a little over half of all transactions take place during western trading hours, which are 10 a.m. to 10 p.m. UTC. This indicator may show that the popularity of DOGE is relatively evenly split into different regions of the world.

Is Now a Good Time to Buy Dogecoin?

When taking a look at Dogecoin through the lens of these trading signals, large investors executing large transactions will most likely have the biggest impact on the price of DOG

E. As such, it is important to keep an eye on these transactions and whether or not they are buying or selling. 

While it is impossible to tell what these large investors will do next, it may be worth taking a look at past data to try and gain some insight and predict what they might do next. 

How to Buy Dogecoin?

DOGE is a popular token and is available on a variety of crypto trading platforms. However, some of the best platforms that offer DOGE trading are eToro, Robinhood and WeBull. 

To get started on these platforms, navigate to its website, create an account and verify it, connect your bank and begin trading.

  • securely through eToro's website
    securely through eToro's website
    Best For:
    Demo Accounts
    Rating:
    Read Review

    Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk

    Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more

  • securely through Robinhood Crypto's website
    securely through Robinhood Crypto's website
    Best For:
    Buying & selling Dogecoin
    Rating:
    Read Review
  • securely through Webull Crypto's website
    securely through Webull Crypto's website
    Best For:
    Low Minimums
    Rating:
    Read Review

How Does Dogecoin Fit Into the Bigger Picture?

Dogecoin is a meme coin with little utility. Its primary use is that of payment. For example, you can buy Tesla merch with DOGE. Other projects are looking to provide much deeper utility to their users. However, If DOGE can find a way to attract new users, from its payment system to celebrity endorsements, the door is still open for the token.

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About Caden Pok

Caden has been involved with cryptocurrency for several years. He began trading and investing in crypto in 2018. Now, we mines multiple coins and holds positions in Cardano and Ethereum. He is very experienced with DeFi technology.