Dogecoin holders take profits amid mass sell-off

Over the past week, Dogecoin (DOGE) showed an impressive 36% increase. However, this rally might be under threat due to the activity of long-term holders (LTH) who have started actively selling their assets. This wave of sales adds additional volatility and could make it difficult for DOGE to maintain its gained positions.

Long-Term Investors Increase Selling Pressure

The Age Consumed indicator recorded a sharp spike in activity. This indicator reflects how long assets were held before being sold, and its growth indicates a significant movement from LTH. According to analysts, such activity has not been seen since June 2023, making it the largest sell-off in nearly two years. This suggests that investors who traditionally held DOGE are now actively taking profits.

In the cryptocurrency community, long-term holders are often considered a «pillar of stability» for an asset. Their stability reduces overall volatility and creates a sense of trust. However, when such investors begin selling off, it adds pressure to the market. A massive reduction in LTH positions can not only increase volatility but also cause concern among short-term traders, leading to a chain reaction.

Currently, Dogecoin is demonstrating mixed signals. The technical indicator Ichimoku Cloud reflects a bearish momentum, despite current candles trading above the cloud. This indicates a potential upward trend, but ongoing pressure from long-term holders could quickly weaken optimism. If sales do not subside, DOGE risks losing its recently gained momentum.

Key Support Levels and Development Scenarios

At the moment, Dogecoin's price is approaching a critical support level of $0.220. If this level is breached, the price could drop to $0.198, erasing much of the recent growth and strengthening bearish sentiment. In this scenario, the meme coin may face further sell-offs and price declines.

On the other hand, if DOGE manages to hold the $0.220 mark and bounce back, the asset has a chance to turn $0.245 into a new support level. A breakout above $0.245 would open the path to the next target at $0.268. This would strengthen the cryptocurrency's position and reduce correction risks, giving bulls a chance to resume the rally.

In the coming days, the Dogecoin market is expected to be highly volatile, and its ability to hold key levels will determine the further direction of its price movement. Traders are advised to closely monitor the activity of long-term holders and the market's reaction to critical support levels.