Dogecoin Price Struggles as Whale Activity Falls Sharply—Is a Downturn Ahead?

Whale Activity Dwindles, Impacting Dogecoin's Price and Volatility

Whale activity in Dogecoin's market has declined significantly, with large transactions dropping to nearly 88% below mid-November 2024 levels. Historically, these large trades have been a key factor in the currency's stability.

Peak Whale Activity and Subsequent Decline

Whale activity surged during the latter half of 2024, particularly during November and December. However, by mid-November, this activity plummeted, resulting in a sharp reduction in large transactions. This shift in market sentiment was evident in the near disappearance of whale transactions by February 2025.

Potential Factors Driving the Decline

According to market analyst Ali, this drastic decrease in whale activity may stem from several large institutional investors and holders reducing or reallocating their investments.

Impact on Price and Market Dynamics

Whales traditionally provide liquidity and stability to the market. Their reduced presence could lead to weaker support for Dogecoin's price and increased volatility, as the market becomes more retail-driven.

Reduced Volatility in Dogecoin's Price

As whale activity decreased, so too did the volatility in Dogecoin's price. This is reflected in the price action observed from late December 2024 to early 2025. Price movements were noticeably less volatile during this time, with minimal fluctuations observed as Dogecoin oscillated within a narrow range.

Market Analyst Perspective and Critical Support Levels

Analyst best_analysts expressed a bearish outlook for Dogecoin, citing the reduced whale activity and fading market support. The critical support levels for DOGE are identified at $0.22, with a stronger support zone between $0.176 and $0.18. If DOGE breaks below these levels, further price declines are anticipated.

Hesitation in the Derivatives Market

Despite the bearish sentiment in the spot market, the derivatives market also exhibits some hesitancy. Dogecoin's derivatives trading volume currently stands at $1.3 billion, with a slight decline of 0.23% observed in the last 24 hours. The decline in open interest suggests a loss of confidence in Dogecoin's uncertain price direction.

Conclusion

The downturn in whale activity for Dogecoin has had a significant impact on the currency's price and volatility. While the derivatives market remains somewhat hesitant, the outlook for Dogecoin remains uncertain until a clear trend emerges.