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Dogecoin price crossed the $0.17 mark on May 23, bringing its monthly timeframe gains to 45%, on-chain data trends unveil key catalysts behind the ongoing DOGE price uptrend.
DOGE Miners Return to Accumulation Mode After Bitcoin Halving
Dogecoin delivered a positive price performance in May 2024, rising from $0.12 to hit a monthly peak of $0.17 at the time of writing on May 24.
While the likes of PEPE and Floki Inu have raced to triple-digit gains, DOGE’s 45% uptick in May 2024 is certainly nothing to scoff at.
Based on media headlines, bullish tailwinds from US macroeconomic indices, as well as the Gamestop saga spreading towards the crypto markets, have been pivotal to the surge in investor demand for memecoins over the last three weeks.
However, a closer look at the underlying on-chain data trends suggest that a shift in Doge miners’ sentiment in the aftermath of the recent Bitcoin halving has also played a vital roll in Dogecoin’s 45% price uptick in May 2024.
IntoTheBlock’s miner reserves chart below tracks real-time changes in the total number of coins held in the custody of recognized Dogecoin mining firms and mining pools, providing real-time insights into changes in miners’ short-term trading sentiment.
An increase in miners’ reserves suggests that the majority of miners are bullish on the native coin’s short-term price prospects. Hence, they opt to accumulate newly mined coins for future profits.
The trend observed in the chart above shows that Dogecoin miners entered a selling frenzy in the week leading to the April 20 Bitcoin halving. They offloaded 160 million DOGE cutting their balances from 4.25 billion DOGE to a yearly-low of 4.09 billion between April 13 to April 20.
However, since the execution of the Bitcoin halving on April 20, there has been a visible shift in the Dogecoin miners’ trading sentiment. The chart above shows that DOGE miners have flipped into accumulation mode, adding 70 million DOGE to their cummulative reserves, which brings their current balances to 4.16 billion DOGE at the time of writing on May 23.
Valued at the current prices, this implies that Dogecoin miners have rapidly acquired $11.7 million worth of DOGE since the Bitcoin halving on April 20.
This aligns with the widespread speculations that a large number of Bitcoin miners rendered unprofitable when the block reward was slashed from 6.25 BTC to 3.12 BTC may have opted to repurpose their equipment to mine cheaper alternative Proof-of-Work (POW) coins, such as DOGE.
If this narrative plays out in the long-term, with superior mining equipments and advanced technology and relatively higher profitability, the new entrant Dogecoin miners could now be more willing accumulate more coins rather than sell periodically to cover costs.
Consequently, a persistent decline in the number of newly-mined coins flooding the markets could help accelerate DOGE price upswings as the memecoin market rally intensifies, and maintain higher support levels during correction phases.
DOGE Price Forecast: $0.20 Breakout in Focus
Dogecoin price is hovering just above the $0.17 level at the time of writing on May 23. Having delivered 45% gains for the month, Dogecoin price looks now set to make another leg-up towards the $0.20 territory, thanks to DOGE miners $11.7 accumulation frenzy.
During this consolidation phase in the market, investors are eagerly awaiting the verdict on the Ethereum ETF. The price of Dogecoin is expected to remain above $0.14 due to the substantial support shown by the IntoTheBlock GIOM indicator. On the other hand, in order for the bulls to achieve the target price of $0.20, bulls need to overcome the critical resistance level at $0.18 where 750K addresses are holding 13.3 billion doge coins.