The Dogecoin rally is showing remarkable strength, but not for the reason you might think. While price action grabs headlines, a deeper on-chain narrative is unfolding: DOGE holders are displaying unprecedented levels of conviction, refusing to sell their coins even as prices climb. This “diamond hands” mentality is fueling speculation that the meme coin could be gearing up for a run toward a 2025 high.
The Liveliness Plunge: A Testament to Holder Conviction
The most compelling evidence of this holder fortitude is a key on-chain metric: liveliness. As defined by blockchain analytics firm Glassnode, liveliness measures the ratio of coin days destroyed to the total coin days created. In simpler terms, a falling liveliness score indicates that long-term holders (LTHs) are spending fewer of their old coins, choosing instead to let them sit dormant.
Over the past month, DOGE’s liveliness has not just dipped—it has plunged, signaling a dramatic slowdown in sell-offs from its most steadfast investors. This trend suggests a powerful shift from speculative trading to conviction-led holding, effectively reducing the available supply on the market and creating a stronger foundation for future price appreciation.
The Net Holding Trend Confirms the Accumulation
This narrative is further bolstered by Dogecoin’s Hodler Net Position Change, a metric that tracks the net flow of coins into long-term storage wallets. Since early September, this indicator has seen a steady uptick, definitively confirming that more DOGE is being withdrawn from circulation and locked away for the long haul.
For any asset, a reduction in sell-side pressure is a classic bullish signal. It indicates that investors are betting on higher prices ahead and are less likely to panic sell during short-term volatility. This creates a much more stable and potentially explosive price environment.
Can Buyer Momentum Overcome Overbought Signals?
The critical question now is whether this wave of accumulation can provide enough momentum to push DOGE through key resistance levels. The next major target is $0.29, with a potential sight on the January high of $0.33.
However, traders are advised to proceed with cautious optimism. Daily chart analysis reveals that Dogecoin’s Money Flow Index (MFI), which measures buying and selling pressure by combining price and volume data, is deep in overbought territory with a reading above 80.
As a renowned resource like Investopedia explains, an MFI reading above 80 typically suggests an asset may be overbought and due for a short-term pullback or period of consolidation. This doesn’t negate the long-term bullish holder narrative, but it does indicate that the path upward may not be a straight line.
The Verdict: Strength Meets a Reality Check
In summary, Dogecoin finds itself at a fascinating crossroads. On one hand, profound on-chain data reveals a community of holders with ironclad conviction, actively accumulating and reducing sell-side pressure. This is a fundamentally strong position for any asset.
On the other hand, momentum indicators are flashing a short-term warning sign that the rally may need to catch its breath. For the bulls to win out and propel DOGE toward its 2025 highs, the underlying holder strength will need to overpower these technical overbought conditions.
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