According to IntoTheBlock, as the centrality of coins in whale-level wallets increases by 6.8%, the rate of increase in dogcoin holdings also increases. The increase in the upside rate is likely related to the significant discount in dogcoin trading.

As the data from IntoTheBlock shows, the asset is less profitable compared to the previous cycle. As of press time, only 54% of traders or investors are profitable from holding DOGE, while the same indicator showed at least 70% only a month ago.

Dogs on a chain of coins Source: IntoTheBlock

The sudden drop in profitability is likely related to the centralization of "buy" orders placed by traders after the first spike in the price of dogcoin in April 2021. During the run, the dogcoin reached a final high of $0.74 and then fell.

Why whales are increasing their holdings

The main reason behind the increase in buying power is most likely related to the significant discounting of cryptocurrencies. As with most markets, dogcoins have lost more than half of their value, which has provided whales with a steady, gradual and cheap increase in holdings.

Typically, the increased amount of money centralized in whale wallets is considered a bullish trend, as whales only take profits at or near the top of bullish rallies in various tokens.

If retail investors dominate the holder composition, assets will face greater selling pressure and therefore fall further rather than consolidate and recover. The same thing happened with DOGE as most of the whales removed the market in May 2021 and reallocated their assets to private traders, thus sending the asset into a long-term downtrend.