On January 12, Dogecoin's market value nudged close to $0.09, effectively gaining 13% following the announcement by Elon Musk's X hinting at the forthcoming rollout of a P2P payment platform.
Earlier in January, X, a social media titan established by Elon Musk, published a blog post titled "Transforming the Global Town Square." This exemplifies their vision for 2024, which includes integrating robust artificial intelligence (AI) capabilities within advertisement features and introducing an efficacious peer-to-peer payments system. Such optimistic initiatives sparked a surge in the Dogecoin price.
Our aim is to commence peer-to-peer payments, thereby unlocking more consumer utility, creating a plethora of commercial opportunities, and exemplifying the power of harmonizing more aspects of life in a single setting.
– X.com, Jan. 9
Over the years, Elon Musk and X's alignment with Dogecoin has been evident. Most notably, the Dogecoin logo was briefly incorporated into their website back in 2023.
Consequently, X's recent unveiling of its P2P network plans has instigated speculations about the possible use of the Dogecoin network by this social media behemoth.
The above chart from TradingView demonstrates a 13% rise in the Dogecoin price following the blog post. Nonetheless, analysis of on-chain data signals that such a rally might be ephemeral.
Sale of 800 million Dogecoins Could Threaten the Price Surge
In the aftermath of Dogecoin's 13% rally, which led to it reclaiming the $0.09 mark on Jan. 11, the price has now fallen below $0.084 as of press time on Jan. 12. Despite the recent price surge, an in-depth analysis of on-chain data trends illustrates a predominantly bearish sentiment across Dogecoin markets.
The current snapshot of the order books on cryptocurrency exchanges signifies a predominant inclination toward selling Dogecoin. The total sell orders considerably exceed the amount of active buy orders.
Typically, when sell orders vastly surpass buy orders, it implies a bearish market momentum.
Presently, Dogecoin sell orders, which exceed buy orders by 48 million DOGE, exert a downward pressure on its price due to the increased supply exceeding demand.
Current market dynamics suggest an impending price correction for Dogecoin.
Should the $0.07 Support Be Lost, Major Losses May Be Incurred
Analysis of exchange order book trends suggests that Dogecoin's price may undergo a significant correction in the near future. For this to occur, however, the bearish sentiment must first overcome the initial support buy-wall around $0.07.
Data provided by IntoTheBlock's Global In/Out of the Money (GIOM) identifies the price point at which DOGE-funded wallets were acquired. This data shows that the largest cluster of current Dogecoin holders acquired their stock at an average price of $0.072.
A drop below this support level could incite a sense of panic in the market and possibly catalyze larger losses.
Contrary to the bearish forecast, bullish traders have the potential to alter this prediction if the Dogecoin price surpasses $0.10. However, resistance near the $0.095 could pose a significant barrier to this goal.
