Elon Musk may finally endorse Dogecoin as whales concentration woes are over – FXStreet

  • Dogecoin price shows promise of a bounce after a week-long corrective period.
  • The Tom DeMark (TD) Sequential indicator presented a buy signal, forecasting that a bullish impulse is underway.
  • A decisive close above $0.055 could result in a 40% upswing to the 23.6% Fibonacci retracement level at $0.072.

Dogecoin price has endured a healthy correction to a critical support level. Now, a confluence of bullish indications suggests that the DOGE might be due for new all-time highs.

The supply concentration issue garners a response from Robinhood

Tesla’s CEO Elon Musk’s tweet about Dogecoin’s “supply concentration” generated panic around market participants, forcing some to market-sell their holdings. The sudden spike in downward pressure saw the meme coin take a 27% nosedive within hours.

When looking at IntoTheBlock’s Whales index, Musk’s concerns are indeed legit. Currently, roughly 46% of all DOGE’s circulating supply is held by nine addresses. One particular entity has nearly 37 billion tokens.

Given the massive number of tokens these whales own, they have a disproportionate impact on prices because of their ability to coordinate buying and selling activities.

Dogecoin Whales Concentration

Dogecoin Whales Concentration

Elliptic, a blockchain data tracking company, came out to clear the air around Dogecoin’s whales concentration. After an in-depth on-chain analysis, the firm concluded that the biggest whales on the network could be Robinhood. This financial services company purchased a large number of DOGE tokens before it started offering for trading to its users in June 2018. 

Robinhood put to rest Dogecoin’s supply concentration woes by stating that it “does NOT currently invest in cryptocurrency or use any customer cryptocurrency” for its benefit. The brokerage firm also added,

We are not alone. Just like other crypto platforms, for operational security reasons and to protect customer privacy, we will not confirm which addresses do or do not belong to us.

Now that the biggest Dogecoin whale on the network has been revealed, Musk is an inch closer to endorse the meme token. If this were to happen, market participants would likely go into FOMO, pushing DOGE price to new record highs. 

Dogecoin price eyes a 40% upswing if crucial support holds

From a technical perspective, it seems like Dogecoin price is ready for a significant bullish impulse. The TD Sequential indicator presented a buy signal in the form of a green nine candlestick on DOGE’s 12-hour chart right around the 61.80% Fibonacci retracement level, which traders regard as the “golden retracement zone.” 

A spike in buying pressure could help validate the bullish outlook and lead to a one to four 12-hour candlesticks upswing towards the 23.60% Fibonacci retracement level at $0.072. A break of this resistance level could push Dogecoin price to new highs around $0.12.

DOGE/USDT 12-hour chart

DOGE/USDT 12-hour chart

Regardless, investors should note that a failure to hold above the 61.8% Fibonacci retracement level at $0.047 will invalidate the bullish thesis. In this case, Dogecoin price will likely pull back to the 78.6% Fibonacci retracement level at $0.036.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.