ANALYSIS OF THE WINTER 2020/2021 DOGECOIN PUMP
CURRENT MARKET STATE AS OF FEBRUARY 3RD, 2021
Please note for the purpose of this breakdown; I use Kraken Volume numbers only paired to USD for trading.
DOGECOIN is currently trading little unchanged in price against the USD from 24 hours ago, down roughly 1.5% at $0.0324 USD|DOGE and ฿0.00000090|DOGE. Bitcoin is currently trading up roughly 7.5% at $36,500 USD per BTC.
It is clear after reviewing pricing charts, along with market volume data, DOGE coin entered into what is known as a “Test Pump” phase of a what’s known as a Pump and Dump at roughly 7:00PM EST on January 1st, 2021.
THE WHALES ACCUMULATE...
In the months leading up to the Test Pump, DOGE had been trading sideways with nearly no deviation from it’s approximate price point of $0.0022 to -$0.0034.
During these months Volume had remained relatively stable with trade volume of DOGE to BTC between 4 Million – 30 Million DOGE to USD transacted daily on Kraken.
DRAW ATTENTION...
On December 15th, DOGE/USD Volume on Kraken was 15 Million DOGE Traded.
That number jumped one day later - December 16th, 2021 to over 200 Million DOGE traded for USD, however there was little movement in price.
This was absolutely the point at which the pump process began.
There are two most likely possible scenarios to explain the rapid rise in volume from 12/15 to 12/16 where volume rose almost 14 times from the previous trading day.
Either the “market manipulators” gave their final “last men to know/lowest level of investment” insiders the information of the coming pump, allowing them to purchase only a limited amount of DOGE over a short period of time—as buying higher volumes would only cause the price to drastically rise. Or...
It is more likely this was the Pump Team themselves generating the 14 fold increase in volume, as the price of DOGE was not affected. How so?
They accomplished this by simply buying and selling to themselves, only losing the insignificant exchange fees which would have been charged on the trade.
The trade group simply sold into their buy walls, or vice versa, bought into their sell walls, which were placed near the market price.
This volume was created deliberately to draw attention to DOGE. Volume in markets, specifically spikes in volume, always draws attention to traders.
For the next four days through December 20th, volume remained high, from 150 Million DOGE to nearly 1 Billion Doge Transacted on 12/20/21- with only a 60% increase in price.
This kind of volume increase can only be explained by the Pump Group creating large volume trades amongst themselves at low prices simply to draw attention.
Volume remained moderately high up until January 1st, 2021, when the actual Test Pump began.
THE TEST PUMP
Volume spiked from it’s already higher 250 Million-400 Million per day on average over the preceding week, to over 2.1 Billion DOGE traded on 1/1/21 with the price tripling from 0.0005 to reaching a high of roughly 0.014.
PATIENCE...
For the next 26 days; volume waned fell and stabilized in the 100 to 400 Million DOGE per day… with the price stabilizing as well and holding steady for much of that time at roughly 0.008 USD. This time period is explained in more detail below after the pump description. But in short, the Whales used this time to slowly buy as much DOGE as possible in small amounts, not driving up prices, and keeping and volume low.
THEN PUMP
On January 27th, at approximately 11:00PM EST, Volume jumped in one hour from 20 Million DOGE, to nearly 600 Million, with the price tripling in price at a high of roughly 0.016.
The full pump went on, lasting roughly 29 hours ending around 5AM the following day, with hourly volume approaching 1 Billion DOGE per hour and the price topping out at 0.088 USD-- A ROUGHLY 10x increase off it’s Pre-Test-Pump price point.
Since the peak of the Pump on January 28th at 11:30PM EST, and the following rapid decline in price that followed on January 29th, the coin fell to a low of roughly 0.025, rebounding to 0.041 on February 1st, and now stabilizing around 0.033 USD early Morning Hours of February 3rd. Volume is still elevated at roughly 30-50 Million DOGE per hour.
WHY TEST A PUMP? IS IT A TEST?
No it's partially a test, but mostly, it's designed to shake out smaller holders. Drive up price 3x, massive sell off- of which you're just buying and selling to yourself scaring people into selling their DOGE.
Whale traders and Pump Groups use test pumps to find resistance levels in price, as well as shake out as many weak hands/coin holders as possible. Shake out, means get DOGE coin holders OUT of the market.
The reason for this is weak hands provide no support for the whales when they actually do The Pump. This is why there was nearly 26 days between the “Test Pump” and the “Real Pump”.
The price was driven up, tripled, a lot of holders sold, the whales accumulated a lot of coins at prices under 0.015, many under 0.01 as the test pump waned and prices began to fall and stabilize for 26 days. During those weeks, they kept volume higher, driving the price up and down just slightly, literally reducing the amount of available coins on the float. They would buy and sell to themselves, but only buy other peoples coins, not sell to them. If they wanted cheaper coins, they would simply put up huge sell orders, invoking fear – high supply, huge sell off coming, I, the small trader should get out now… selling his coins to the whales at a low price.
This is why volume remained high during those weeks leading up to the actual Pump.
During the Pump, it’s likely 80% of the volume, the Billions of coins exchanged each day, were the whales simply buying and selling to themselves. Just like they are now.
It’s a cost of doing business.
Now that the coin has roughly stabilized at 1/3 the high price DOGE saw during the pump, volume remains high. This is not trader activity. These are the whales buying and selling to themselves, using Sell Walls and Buy Walls to push the price up and down, to shake out even more holders.
WHY ON EARTH WOULD THE WHALES WANT THE DOGE BACK?
Because pump and dumps are cycles. They are not one time events. There is no way to know if the pump on January 27th was the “Real Pump”, it could have, and quite possibly just been a larger test pump. Whales will repeat the test and rests as much as needed, to obtain cheap supply.
After a test pump or pump, the whales want nothing more than to buy back the supply. Why? Because when you own all the coins you own the coin. You set the price. Period.
Whales seek to own a significant share of the circulating supply of coins. It’s difficult to ascertain how many DOGE percentage wise they hold, due to the extremely high number of coins emitted. The extremely high number of coins lost or destroyed over the years by investors who gave up, lost drives, etc… But it’s safe to assume that 70-80% of the volume is the whales.
WHY DOES THIS MATTER?
Everyone on the DOGE forums is saying HODL. Hold your coins! Well, simply put, that is exactly what the whales do NOT want you doing. Without owning the supply, they cannot create massive sell walls on all the exchanges, dump huge numbers into buyers at high prices only to push the price down later and shake them back out at a discount. They have to own the supply. It is as simple as that.
With enough BTC on the other side invested, they can simply set the price. If they own 80% of the coins… even if every DOGE holder teamed together they could still just wipe you out. They hold too much. You want to sell high? They will throw up huge sell walls low priced, scaring out “weak hands” increasing their supply.
SO WHAT NEXT?
Well my opinion is moving forward DOGE holds incredible value. It is currently 15th in Marketcap. It’s priced at 0.033, with a total market cap of 4 Billion. I think it is safe to say that it is far more likely given the state of todays’ market insanity, people are chasing big gains. Gamestop… Huge Returns.
Take DOT for example, Polkadot. It’s marketcap is currently roughly 17 Billion. I find it very difficult to believe 153 Billion of either FIAT or CRYPTO will be cashed in to pump the price of DOT up to 10 times it’s current value, to 170 Billion. No. That WILL not happen.
However people want 10x returns. It has always been the magic number. And Doge, it’s been around since the early days, it works, it’s got a huge cult following, theres a huge supply, it’s widely known. DOGE is the ideal candidate to go from 0.033 to 0.33 or even 0.66.
I don’t think it would be hard to see crypto marketcaps shift, DOT shaves off 5 Billion, Bitcoin shaves 2 or 3%, a number of other alts add in 3-4 billion combined—and you’ve got a 40 Billion Marketcap for DOGE. 10X Returns.
80 Billion is not impossible to imagine even 20x returns. Other coins are bloated. That is the truth. People want BIG returns and they are not going to see huge returns with HUGE market cap coins. I’m sorry DOT holders, but it’s not going to 20X any time soon. 360 Billion Market Cap? I think NOT.
However DOGE hitting 40, 60, or maybe even 80 billion just might be—realistic. People want the returns. The price of the coin doesn’t matter. It’s about turning total investment into 10 or 20x more.
So that’s where we are at… right now the whales are holding the price IN PLACE. You can see the walls. All thy want is to buy back the coins they sold at VERY high prices… 0.088, 0.078… etc. Buying them back at 0.025-0.03 is a deal! Because next time they will drive it even higher.
Buy high? They don’t care. Sell higher. Sell low? They will push the price down, shake out weak investors and buy the coins they sold cheap for half the price of cheap.
DOGE has my attention. I’m going long.
Comments welcome,
Stratobitz
Feel free to follow me a u/Stratobitz , Twitter @ Stratobitz or on Bitcointalk - Username Stratobitz
