Dogecoin (DOGE) has suffered a significant decline, dropping over 70% since reaching its peak of $0.48 in December 2024. Despite this downturn, the wealthiest DOGE holders have been accumulating tokens during the dip, suggesting confidence in a potential rebound.
Onchain Data Signals Possible Price Recovery
Onchain metrics from Santiment indicate that wallets holding at least 1 million DOGE have increased by 1.24% since early February, even as prices have fallen. At the same time, the number of active addresses has surged to a four-month high, reflecting rising network engagement.
- Large holder accumulation during a price decline is typically a bullish signal, suggesting that investors see the current price as undervalued and are positioning themselves for future gains.
- A rise in active addresses often points to increasing retail interest, which can support price recovery if driven by real adoption rather than speculative trading or panic selling.
This pattern mirrors DOGE’s 200%-plus price surge in November 2024, which was preceded by a similar uptick in network activity and accumulation by large holders.
Oversold Conditions Suggest a 30% Upside Potential
Dogecoin is currently testing a strong support zone, which has historically triggered significant bullish reversals. This support level consists of:
- A multi-year ascending trendline that has provided key rebounds in the past.
- The 200-week exponential moving average (EMA) at around $0.13, a historically significant level for price recoveries.
Adding to the bullish outlook, the Stochastic RSI, an indicator that measures momentum and overbought/oversold conditions, has formed a bullish cross in the oversold region (below the 0.30 threshold).
- This signal typically suggests that selling pressure is weakening and that a price rebound could follow.
- Similar Stochastic RSI crossovers preceded DOGE’s 400% price rally in 2024 and 88% surge in 2023.
The first major resistance for DOGE lies around $0.22, aligning with the 50-week EMA and key resistance levels from March-April 2024. If bullish momentum builds, DOGE could see a 30% rally in the coming weeks.
Potential Risks and Key Support Levels
Despite the positive indicators, DOGE’s bullish outlook depends on holding its current support levels. If the price fails to sustain above the multi-year trendline and 200-week EMA, the bullish setup could be invalidated.
- A breakdown below this confluence could lead to a further correction towards $0.12, a key support level from March-May 2024.
For now, investors are closely watching whether Dogecoin can maintain its strong support levels and trigger the anticipated rebound, or if further declines are on the horizon.
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