A supply squeeze may be on the horizon for the foremost meme coin, Dogecoin (DOGE). This follows a massive surge in DOGE’s stock-to-flow ratio, which is expected to impact its price positively.
How Supply Squeeze Could Lead To Price Surge For Dogecoin
Data from the on-chain analytics platform Santiment shows that Dogecoin faces a supply squeeze, with the meme coin’s stock-to-flow ratio rising. Between August 18 and 19, this stock-to-flow ratio surged to an all-time high (ATH) of 69.25. This metric measures a commodity’s scarcity and indicates a massive demand for Dogecoin.
This development could lead to a supply squeeze for Dogecoin as the demand for the meme coin continues to outpace its supply. Such a supply squeeze ultimately drives up prices, meaning that a significant price rally is currently on the cards for Dogecoin. Other on-chain metrics confirm that demand for Dogecoin is rising and that a price surge could happen anytime soon.
Data from the market intelligence platform IntoTheBlock shows that Dogecoin’s large transactions have surged these past few days and hit a 7-day high of 7.37 billion DOGE on August 19. This indicates increased whale activity and suggests that these investors are heavily accumulating Dogecoin ahead of its next leg up, which looks imminent.
Furthermore, this shift to accumulation among Dogecoin whales is also evident in the large holders’ netflow, which has spiked by over 3,200% in the last seven days. During this period, this category of investors has recorded more inflows than outflows, indicating that they are adding to their positions and moving them off exchanges.
This massive demand for DOGE isn’t only among the whales, as the meme coin’s trading volume over the last 24 hours suggests that retail investors are also accumulating the foremost meme coin. Data from CoinMarketCap shows that Dogecoin’s transaction volume has surged by over 51%, with $625.3 million traded during this period.
What To Expect From Dogecoin’s Price
Crypto analyst Javon Marks has provided insights into how high Dogecoin could rise on its next leg up. The analyst remarked that the meme coin could enjoy a 513% rally to reach the $0.6533 price target. Interestingly, the analyst added that this price surge could happen at “high speeds,” indicating that it could happen faster than some might imagine.
This bullish prediction followed his analysis of Dogecoin’s relative strength index (RSI), which he noted is nearing a breakout point and diverging with prices. With such bullish signals and prices still broken, Marks is confident that a “major bull move” is underway, which would send Dogecoin to this price target.
At the time of writing, Dogecoin is trading at around $0.1052, up over 5% in the last 24 hours, according to data from CoinMarketCap.
Cover image from Dall-E, chart from Tradingview
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Reynaldo Marquez
https://www.newsbtc.com/dogecoin-2/dogecoin-faces-supply-squeeze-what-this-means-for-price/
2024-08-20 17:00:12
