Main Points:
- Buying the Dip: Despite a steep drop of over 70% from a December 2024 high of US$0.48, large Dogecoin holders are actively increasing their positions, suggesting they view the current price as an attractive entry point.
- Positive On-Chain Signals: On-chain data from Santiment shows a 1.24% increase in wallets holding over 1 million DOGE since early February, along with a surge in active addresses, indicating heightened network activity and growing investor interest.
- Technical Indicators Point to Rebound: DOGE is testing key support levels including a long-term uptrend line and the 200-week exponential moving average (EMA) around US$0.13. Additionally, the Stoch RSI has formed a bullish cross in the oversold region, a pattern that in previous cycles preceded significant rallies.
- Resistance and Risk Levels: With first major resistance seen at around US$0.22, past price surges in similar technical setups have resulted in dramatic gains. However, failure to hold support could lead to a fallback to lower support levels, potentially around US$0.12.
1. Introduction
After reaching a peak of US$0.48 in December 2024, Dogecoin (DOGE) experienced a drastic decline of over 70%. Despite this steep drop, major holders are capitalizing on the situation by buying the dip, signaling their confidence in the coin’s recovery. This article explores the implications of this strategic buying, the technical indicators supporting a potential 30% rebound, and the broader impact on market sentiment.
2. Major Holders and On-Chain Activity
Large investors often see significant price drops as buying opportunities, believing the asset is undervalued. Recent on-chain data from Santiment confirms that the number of wallets holding at least 1 million DOGE has increased by 1.24% since early February. Simultaneously, the number of active addresses has reached a four-month high, underscoring a revitalization in network activity.
This dual trend suggests that not only are major holders building positions, but increased participation by smaller investors may also be contributing to a broader market base. Such engagement can provide a strong on-chain foundation for any forthcoming price recovery, similar to patterns observed during past rallies.
3. Technical Analysis and Rebound Potential
3.1. Support Levels and Trend Lines
Dogecoin is currently testing important support areas:
- Long-Term Uptrend Support: DOGE is holding onto a long-term upward trend line that has historically triggered rebounds.
- 200-Week EMA: The 200-week exponential moving average, currently around US$0.13, is another critical support level that has provided a floor for price action in previous cycles.
3.2. Momentum and Oversold Conditions
Momentum indicators also hint at a potential rebound:
- Stoch RSI: The stochastic RSI has recently formed a bullish cross while in the oversold region (below 0.30). This indicator has historically preceded dramatic rallies for DOGE, including a 400% surge in 2024 and an 88% rise in 2023.
3.3. Resistance Levels and Risk Considerations
DOGE’s first major resistance is identified at approximately US$0.22, a level that aligns with the 50-week EMA and past resistance observed in March to April 2024. Should the coin maintain its support levels and break through this resistance, a rebound of around 30% could be within reach. Conversely, failure to hold the current support could lead to a retracement towards lower support levels, possibly around US$0.12, as seen in previous downward corrections.
4. Market Sentiment and Future Outlook
The behavior of large holders, combined with strong on-chain activity and supportive technical indicators, signals a bullish outlook for Dogecoin. Institutional and retail investor engagement appears to be on the rise, which, if sustained by genuine network usage rather than mere speculative trading, could underpin a durable price recovery.
The combination of increased accumulation by major holders and rising network activity suggests that DOGE’s current depressed price might be temporary. Historical patterns in similar market conditions have shown that such setups can lead to substantial rallies, and many market participants are eyeing a potential 30% increase in the coming weeks.
5. Conclusion
In summary, despite Dogecoin’s dramatic fall from its December 2024 high, major holders are actively buying the dip, confident that the coin is undervalued. On-chain data and technical indicators both point to a potential rebound, with key support levels holding steady and momentum indicators signaling a reversal. If DOGE can overcome its initial resistance at around US$0.22, a surge of approximately 30% is within the realm of possibility. However, investors should remain cautious, as a failure to maintain these supports could result in further declines.
As always, while the technical outlook appears promising, investors must weigh the inherent volatility of the cryptocurrency market and manage risks accordingly.
