Dogecoin has staged a notable recovery over the past five days, following a significant downturn due to a broader market sell-off. During the first five days of August, the cryptocurrency experienced a sharp declineplummeting 38%, from $0.1348 to a low of $0.0831. However, DOGE has shown resilience in the face of these challenges. After reaching the $0.0831 mark, the cryptocurrency started a remarkable comeback.
The past five days have DOGE has recovered by around 25%, a recovery that has significantly lifted the price from recent lows. While this upward move has not yet been enough for holders to fully recoup the losses incurred earlier this month, it shows the return of positive momentum for DOGE.
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This partial price recovery is accompanied by a revival in key market metrics, indicating that investor sentiment towards Dogecoin is turning bullish again. Trading volumes have increased, indicating renewed interest and participation in the market.
Dogecoin Major Metrics Fires Bullish Signals
According to data from IntoTheBlockThis recovery has been accompanied by an increase in daily trading volume, most of which has been accumulations that have increased buying pressure. At the time of writing, the volume of large transactions for DOGE in USD is an impressive $1.01 billion. This represents a substantial 54% increase from the seven-day low of $654.96 million on August 3, just before the sharp decline began.
Interestingly, high transaction volume peaked at $1.52 billion on August 5, coinciding with the start of the recovery. This correlation strongly suggests that large holders, often referred to as “whales,” have been actively participating in the DOGE market during this recovery phase and are driving the upward momentum.
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While the measure of large transaction volumes does not reveal whether they are accumulations or sell-offs, the ratio of net flows to large holders’ net flows suggests the former. This metric tracks the balance between large holder accumulation and stock market inflows, providing valuable insights into the behavior of both retail investors and whales. Currently, the ratio is tilting towards large investor accumulation, at 3.49%, compared to a negative 1.85% on Monday, August 5.
Still on the whale activity front, IntoTheBlock’s Bulls and Bears stat suggests the scale is starting to tip towards the bulls. This metric tracks addresses that have bought or sold more than 1% of total trading volume in the last 24 hours, classifying them as bulls or bears respectively. There has been a noticeable increase in bullish activity over the past two days, with 14 bulls compared to 13 bears in the most recent 24-hour period. While the margin may be narrow, the presence of more bulls than bears suggests that buying interest is beginning to outweigh selling pressure.
At the time of writing, DOGE is trading at $0.1045. A successful break above $0.11 could reignite retail interest, which in turn could happen contribute to an increase towards the long-awaited price level of $0.5.
Featured image from iStock, chart from Tradingview.com