Dogecoin starts accumulating as more whales start trading the asset
According to IntoTheBlock, the Dogecoin accumulation rate increases as the concentration of coins in the whale-tier wallet increases by 6.8%. The increase in the accumulation rate is most likely linked to the large discount with which Dogecoin trades.
As data from IntoTheBlock shows, the asset has become less profitable than in previous cycles. At press time, only 54% of all traders or investors are making profit from holding DOGE, while the same metric only showed at least 70% a month ago.
The sudden drop in profits since the first increase in the price of Dogecoin in April 2021 is linked to the concentration of “buy” orders placed by traders. During the race, DOGE reached its last high of $0.74 and then went down.
Why are whales piling up
The main reason behind the increased purchasing power is linked to the huge discounts of the cryptocurrency. As with most markets, Dogecoin lost more than half of its value, allowing for stable, progressive and cheap accumulation for whales.
Typically, the increasing amount of money concentrated in whale wallets is considered a bullish trend as whales take profits on various coins only at the top or at the top of a bullish rally.
If retailers dominate the holding structure, the asset faces more selling pressure, therefore, going further down rather than consolidating and recovering. The same happened with DOGE as most whales exited the market in May 2021 and redistributed their assets to private traders, taking the asset into a prolonged downtrend.