Dogecoin, the king of meme coins, has recently experienced a string of lower lows as the entire cryptocurrency market navigates through bearish sentiment. These ongoing dips have significantly eroded market confidence in Dogecoin, leaving many traders on edge. However, signs of a potential bullish recovery are emerging, hinting that Dogecoin may be preparing for a noteworthy upward move.
Despite a series of price slumps, Dogecoin continues to make attempts at bullish rebounds. Notably, the memecoin kicked off this week with a short-lived surge in momentum. While the upward move quickly fizzled out, it could be a harbinger of a stronger rally ahead.
Technical Indicators Flash Bullish Signs
Dogecoin has been trading sideways for over five weeks, reflecting uncertainty among investors. However, key technical indicators now suggest that bullish momentum is building on the charts. For instance, Dogecoin’s Money Flow Index (MFI) bottomed out below 20 on August 5, before recovering to 63.87 at the time of writing. A similar trend is visible in the Relative Strength Index (RSI), which has managed to push above its mid-point, suggesting that selling pressure has eased.
This lack of significant sell pressure indicates that Dogecoin bulls are gradually gaining control, setting the stage for a possible breakout. The improving MFI and RSI point to growing confidence among investors, especially as Dogecoin hovers around critical support levels.
Adding to the optimism is on-chain data revealing a significant increase in whale activity. According to data from IntoTheBlock, Dogecoin’s large holder inflows surged, with whales accumulating a massive 493.15 million DOGE in just two days. This spike in whale holdings suggests that major players are betting on an upcoming rally.
At the same time, large holder outflows—a metric that tracks the amount of Dogecoin leaving whale wallets—dropped sharply from 442.12 million DOGE to just 78.17 million DOGE. This shift indicates that whales have moved from contributing to sell pressure to adding to their balances, a clear sign of confidence in Dogecoin’s future price action.
Long Positions Pile Up
Further strengthening the bullish narrative is the growing number of long positions at the $0.101 price level. Dogecoin’s net longs heatmap reveals that long positions peaked at this key price zone, with around 4.154 million long positions during its latest retest. In contrast, net shorts within the same price zone only amounted to 1.54 million, underscoring the prevailing bullish sentiment.
The current balance between long and short positions, combined with the whale accumulation, signals that Dogecoin could be gearing up for a significant rally in the coming days. However, this outlook hinges on the absence of any unexpected negative market events that could dampen investor confidence.
Also Read: Dogecoin (DOGE) Surges Above $0.10 As Bitcoin Hits $58,000—What’s Next For The Meme Coin?
Conclusion: Is Dogecoin Ready for Liftoff?
While Dogecoin’s recent price action has been far from spectacular, the underlying technical and on-chain metrics suggest that the memecoin could be on the verge of a bullish breakout. Whale accumulation, combined with a favorable long-to-short ratio, indicates growing optimism in the market. If the momentum continues to build, Dogecoin may soon reward patient investors with a strong rally.
However, as always in the volatile world of cryptocurrencies, caution is advised. Market sentiment can shift quickly, especially in response to external factors. But for now, Dogecoin seems poised for a potential comeback.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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