Recent on-chain data reveals a significant shift in Dogecoin’s profitability metrics, with the popular meme coin experiencing one of the sharpest declines in Supply in Profit among major cryptocurrencies. This development could signal a potential price bottom, according to market analysts.
Understanding the Supply in Profit Decline
According to data from Glassnode, Dogecoin’s Supply in Profit has decreased by nearly 10% over the past month, bringing the total percentage of profitable DOGE holdings to 53.6%. This dramatic shift comes as Dogecoin recently experienced a 15% price crash, highlighting the volatile nature of cryptocurrency markets.
XRP Faces Similar Pressure
Alongside Dogecoin, XRP has witnessed a notable decline in its Supply in Profit metrics, with a 5.2% decrease bringing its total to 81.5%. This trend aligns with broader market observations, though some analysts remain bullish on XRP’s long-term prospects.
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Market Implications and Technical Analysis
The significant decrease in Supply in Profit often serves as a contrarian indicator, potentially signaling a market bottom. Historical data suggests that when profit-taking pressure subsides, assets typically find stronger support levels for future price appreciation.
Comparative Market Performance
While DOGE and XRP struggle, other cryptocurrencies like Toncoin (TON) and BNB have seen substantial increases in their Supply in Profit metrics:
- TON: +23.8% (Total: 94.1%)
- BNB: +17.4% (Total: 86.3%)
- Solana: -4.4% (Total: 35.2%)
Expert Outlook and Price Predictions
At press time, DOGE is trading at $0.173, representing an 11% weekly decline. However, the reduced profit-taking pressure could set the stage for a potential recovery, particularly if broader market sentiment improves.
FAQ Section
What does Supply in Profit indicate?
Supply in Profit represents the percentage of circulating tokens currently worth more than when they were last moved, providing insight into potential selling pressure.
Why is decreasing Supply in Profit significant?
Lower Supply in Profit often indicates reduced selling pressure as fewer holders are sitting on unrealized gains, potentially setting the stage for a price recovery.
How does this affect Dogecoin’s price outlook?
The significant decrease in profit-taking pressure could signal a market bottom, potentially creating favorable conditions for a price rebound in the coming weeks.