Is DOGE at risk? Analyzing the $25M Dogecoin sell-off!

• Dogecoin experienced a 1.4% decline following a large sell-off but quickly bounced back with a 4% rise, trading around $0.148.
• DOGE’s open interest surged to $940 million, indicating strong trader interest.

Dogecoin [DOGE] experienced a positive trend in the past week, breaking through key price points. However, as the price climbed to a notable high, a significant volume of DOGE was transferred to an exchange, indicating a potential sell-off.

Dogecoin sees sell-off

Data from Whale Alert revealed a large transfer of Dogecoin to the Binance exchange on 20th October. Over 176 million DOGE, valued at more than $25 million, was moved in what appeared to be a substantial sell-off.

The wallet involved in the transaction still holds over 10 million DOGE, valued at nearly $1.6 million. This transfer came after Dogecoin’s price saw an upward surge, leading to speculation that holders were cashing out after the price increase.

Dogecoin bounces back from sell-off

Despite the sell-off, Dogecoin has shown resilience. Price chart analysis revealed that selling pressure caused a brief dip in the last trading session. Trading volume spiked to approximately $333 million, confirming that trader sell-offs had temporarily dominated.

DOGE saw a 1.4% decline, trading at around $0.142 at one point.

Source: TradingView

However, as of this writing, Dogecoin has bounced back, regaining its momentum. The price has increased by over 4%, now trading at approximately $0.148. The Relative Strength Index (RSI) analysis shows that DOGE remains in the overbought zone, indicating that demand remains strong. 

Additionally, the $0.130 price level has now become the latest support area, a level last seen in June before the token quickly dipped below it in subsequent sessions.

More open interest, but warning signs flash

According to data from Glassnode, the recent sell-off was temporary, with open interest increasing significantly over the past few days. As of this writing, Dogecoin’s open interest stands at around $940 million, up from $760 million on 18th October, reflecting an addition of nearly $200 million in just two days.

Source: Glassnode

While this rise in open interest indicates renewed trader interest and a positive cash inflow, the current state of Dogecoin’s RSI suggests caution. 

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With the RSI still indicating an overbought condition, there are signs that a price correction may be imminent.

Overall, Dogecoin remains in a strong position despite the recent sell-off, but traders should be aware of potential corrections in the coming days.