DOGE soared 12%, but the fear of missing out signal may end Rebound
Dogecoin has pumped more than 12% in the past day, but the on-chain indicators brewing this trend may herald the end of the Bear Market. In a new article by X, an on-chain analysis company discusses the total holdings trends of major mainstream Crypto Assets.
The "holder total" here refers to an indicator, as the name suggests, it tracks the total number of Addresses holding non-zero balances on a given network.
When the value of this indicator rises, it means that new investors are joining the blockchain or old investors who previously sold are buying back the Token. This indicator also rises whenever existing users divide their assets held for privacy purposes into multiple Wallets. Generally, all three factors play a role simultaneously whenever this trend develops, so it can be assumed that some form of asset adoption is taking place. On the other hand, a decrease in the indicator indicates that some holders have decided to empty their Wallet, possibly because they want to stay away from Cryptocurrency.
Figure 1 shows the total holder trend of BTC, Dogecoin, and other top assets. Recently, the total amount of holdings for most assets has increased, but the number of non-zero wallet addresses for BTC has decreased, which goes against its trend.
More specifically, compared to three weeks ago, the address of the top-ranked cryptocurrency today has decreased by 211,500, which has brought the value of this indicator down to 54.38 million.
This means that some asset investors do not believe that the current pump momentum will continue further, as they have decided to liquidate their holdings at recent prices. Historically, assets in this industry have been very sensitive to investor sentiment, but the relationship between the two is opposite: when investors show fear, uncertainty and doubt, prices often pump, while when investors show fear of missing out, prices will fall.
Therefore, the recent decrease in the total number of holders may actually prove to be a Favourable Information signal for Bitcoin (BTC). As can be seen from the chart, this indicator shows the opposite trajectory of shitcoin, as there have been 46,400 addresses with balances on the network in just the past week.
The analytics firm noted, "This is a sign of traders speculating and gambling on meme coins, even after reaching a local high last week." Based on historical experience, this fear of missing out may not be the best sign for DOGE.
In the past 24 hours, Dogecoin has continued its latest bullish momentum, with its price surpassing the $0.168 mark. However, considering the ongoing development of fear of missing out (FOMO), this momentum may not be sustainable.
(Data Source: Keshav Verma)