Dogecoin has surged over 12% in the past day, but an emerging trend in an on-chain indicator might signal a bearish turn for the cryptocurrency. Recent data shows Dogecoin investors displaying signs of Fear of Missing Out (FOMO). According to an analysis by on-chain analytics firm Santiment, the Total Amount of Holders has been rising for several top cryptocurrencies, including Dogecoin.
The Total Amount of Holders indicator tracks the total number of addresses on a network with a non-zero balance. When this metric increases, it suggests new investors are entering the market or previous investors are buying back in. This increase can also occur when existing users split their holdings into several wallets for privacy reasons. Generally, a rise in this indicator points to some level of net adoption of the asset.
Conversely, a decline in the indicator indicates that some holders are clearing out their wallets, possibly aiming to exit the market. Recent trends show that while most top cryptocurrencies have seen an increase in Total Amount of Holders, Bitcoin has experienced a decline. Over the past three weeks, Bitcoin’s non-zero wallets have decreased by 211,500, reducing the total number of addresses to 54.38 million. This suggests that some Bitcoin investors are skeptical about the current rally’s sustainability and have decided to liquidate their holdings.
Historically, cryptocurrency prices have shown an inverse relationship with investor sentiment. Prices tend to rise when investors exhibit fear, uncertainty, and doubt (FUD), and fall during periods of FOMO. Therefore, the recent decline in Bitcoin’s Total Amount of Holders could be a bullish sign for the asset.
In contrast, Dogecoin’s Total Amount of Holders has increased significantly, with 46,400 new addresses appearing in the past week. Santiment notes this as a sign of traders speculating on meme coins despite last week’s local top. Based on historical patterns, this FOMO might not bode well for Dogecoin.
Dogecoin’s price has continued its upward trend over the last 24 hours, breaking past the $0.168 mark. However, given the ongoing FOMO among investors, this bullish run might not be sustainable.
