DOGE transaction volume increases, whales sell: Is there a threat of Dogecoin correction?

DOGE transaction volume increases, whales sell: Is there a threat of Dogecoin correction?

Dogecoin, one of the most famous meme coins in the crypto ecosystem, has seen a price correction in the first few weeks of April, which was accompanied by an increase in on-chain activity. While DOGE price recorded daily losses of 3.3%, transaction volume increased by almost 80% between April 6 and April 15. Typically, an increase in transaction volume indicates increased user activity, but in this case the price fell by more than 13% in parallel with this growth.

The data shows that during the recent price drop, retail investors and investors with smaller wallets accumulated DOGE, while whales, holders of large holdings, sold their memecoin holdings. Of particular note is the fact that whales holding 1 million to 10 million DOGE tokens dumped their holdings before the price decline. This selling activity could indicate that another price drop could be imminent for DOGE.

Another red flag is the fact that almost 81% of wallets holding DOGE are currently profitable. This could mean that these holders could realize their profits and thus put additional selling pressure on DOGE. This metric is typically used to identify support and resistance levels and assess the likelihood of profit-taking.

At the time of writing, DOGE is trading at $0.1564 and has seen a decline of almost 3.3% on the day. Dogecoin Day, celebrated on April 20, could mean additional volatility for the token. The on-chain metrics suggest that DOGE could suffer a price drop in the near future based on the behavior of market participants and the current profitability of wallets.