Dogecoin Price Forecast: What’s next as DOGE whales de-risk amid low wallet activity 

• Dogecoin risks extending its decline toward $0.20, mirroring suppressed market sentiment.
• Large volume holders offload Dogecoin, suggesting de-risking narratives as cryptocurrencies trim short-term gains.
• Low Daily Active Addresses could be a catalyst for a steady Dogecoin sell-off.

Dogecoin (DOGE) recovery has become elusive, worsened by risk-off sentiment in the broader cryptocurrency market. A 5% decline on Monday sees the largest meme coin by market capitalization exchange hands below $0.22 at the time of writing. 

Interest in DOGE remains shaky based on derivatives data. The futures Open Interest (OI) is down to $3.54 billion after peaking at approximately $5.35 billion on July 22. A steady decline in OI implies weak market sentiment, resulting in fewer traders betting on short-term price increases.

Dogecoin Futures Open Interest | Source: CoinGlass 

Dogecoin whales de-risk amid risk-off sentiment 

Large volume holders of DOGE have, over the past few weeks, persistently reduced exposure to Dogecoin, reflecting risk-off sentiment while suppressing upward price movement.

Addresses with between 10 million and 100 million coins account for 16.11% of the total supply, down from 16.85% recorded on July 17. The black line on the chart below shows that a recovery is underway, but may require time to establish an uptrend.

Dogecoin Supply Distribution | Source: Santiment 

The number of Daily Active Addresses remains significantly suppressed, according to Santiment’s on-chain data. About 47,000 addresses interacted with the network on Sunday compared to 517,000 on June 21 and 675,000 addresses on May 14. 

Fewer active addresses indicate low demand for DOGE – a condition likely to keep the price of DOGE on the back foot, searching for robust support.

Dogecoin Active Addresses | Source: Santiment 

Technical outlook: Dogecoin holds above trendline support

Dogecoin price is struggling to hold $0.22 pivotal level as sellers maintain control over the trend. The Moving Average Convergence Divergence (MACD) indicator’s sell signal and the Relative Strength Index (RSI), which is extending the decline below the midline, reinforce the bearish outlook.

Traders will likely continue reducing exposure with the blue MACD line remaining below the red signal line. Apart from the ascending trendline support on the daily chart below, other key areas of interest for traders include the confluence established by the 100-day Exponential Moving Average (EMA) and the 200-day EMA at $0.21. 

DOGE/USDT daily chart

If the sell-off intensifies due to rampant de-risking among whales and retail investors, support at $0.18 and $0.16 would be in line to absorb the selling pressure. 

Still, the 50-day EMA at $0.21 could back a trend reversal, allowing bulls to reclaim support at $0.22 and affirm their influence ahead of the next leg up toward the critical $0.25 resistance.