Dogecoin price increases by 95%. Can profit taking lead to collapse?

Are we seeing the calm before the storm in Dogecoin? The asset added more than half a million holders in two weeks in February.

However, the number of profit holders and a weak support zone could lead to a potential pullback. Could this be the harbinger of a downward spiral, or is it a... DOGE Will he succeed in halting the decline?

Dogecoin holder count hits record high of 6 million holders

The number of DOGE holders currently stands at 6.5 million, which is one of the most impressive numbers in the cryptocurrency markets. This number was reached on February 2, part of an impressive increase in Dogecoin holders from 5.82 million on January 28 to 6.35 million on February 10. This is an increase of approximately 10% in the number of holders, which is remarkable for a token of this size.

Interestingly, all this growth was followed by rising prices. However, from February 10 to March 4, Dogecoin prices rose from $0.081 to $0.1950, an increase of approximately 141%. There has been some decline since then, leaving DOGE Up 95% since the big move started on February 26.

However, although the number of shareholders increased in early February, it has remained largely stable since the beginning of March.

This may not mean anything on its own, but after a 140% price rise and a growing number of holders, the stable number may mean that new funds are not flowing into Dogecoin. Investors may be unsure whether the uptrend will continue.

Shareholders could create selling pressure

Many holders entered two weeks before the price spike, contributing to the high percentage of holders currently in profit. DOGE.

There are a staggering number of over 5.24 million addresses, which is coincidentally equivalent to the total number of registered Dogecoin holders as of November 24, 2023, in terms of profits. They represent 84.75% of all shareholders. 12.28% of them are facing losses, while a small percentage of around 2.28% of them are breaking even.

Given that around 85% of addresses are currently making gains, it stands to reason that this could lead to significant selling pressure on DOGE. The reason is that many of these holders could cash out their gains and choose to sell their holdings in the coming days, thereby realizing their investment positions.

The last time the percentage of profitable DOGE holders was above 80% was in May 2021. During this period, the percentage of profitable DOGE holders reached a staggering 93%.

Subsequent activity during this period saw a significant market adjustment, with DOGE experiencing a 67.86% correction over the following five weeks. This historical precedent suggests that current market conditions may reflect past results, resulting in a similar market reaction.

Read more: How to buy Dogecoin? Three simple methods for beginners

Dogecoin Price Forecast: $0.15 Support Level Takes Center Stage

Current DOGE coin market activity shows a convergence of trendlines, with the short-term 9-day exponential moving average (EMA) falling below the long-term 26-day EMA. Market analysts and investors often view this event as a bearish indicator.

The trend that emerged after this EMA crossover indicates increasing downward momentum. This indicates that sellers are starting to take control.

If this downward trajectory continues, it is plausible that DOGE price will approach and even test the stable support level at $0.15.

Further downward pressure, if support at $0.15 fails to hold, could lead DOGE price to fall to the next support level, which is around $0.12.

On the other hand, a bullish scenario could emerge for DOGE price if it remains above the $0.15 level, indicating the presence of active buyers and possibly reversing the downward trend. A more definitive bullish signal could be DOGE breaking through the $0.1646 resistance level. This may indicate a change in trend and possibly the start of an uptrend, especially if trading volumes increase, which could indicate a reversal in the uptrend and a target to challenge the $0.1757 resistance.

Remember that in 2021, more than 80% of titles DOGE It was profitable, but its price continued to rise. Given DOGE's strong correlation with the movements of Bitcoin and Ethereum (ETH), similar bullish conditions could lead to a rally.