Dogecoin (DOGE), often viewed as a meme coin, is showing signs of a potential rally despite recent challenges. The market structure remains bullish, indicating that there is still optimism among traders. However, the low trading volume and recent whale selling activity are raising concerns about the strength of this bullish sentiment.
The recent market activity shows Dogecoin forming a falling wedge pattern, typically a bullish signal. A breakout from this pattern suggests potential upward momentum. However, over the past week, Dogecoin’s price has stalled, erasing some gains. Despite this, the market structure remains intact, as evidenced by the absence of lower lows on the daily chart. The Relative Strength Index (RSI) hovers above the neutral 50 mark, suggesting a slight bullish bias.
A significant challenge for Dogecoin is the low trading volume throughout July. In the last 24 hours, the volume has reduced by 32.74%. Even as prices began to rise mid-month, the On-Balance Volume (OBV) showed only a modest increase, indicating weak buying interest. This lack of volume could undermine the potential for a sustained rally. Moreover, the OBV has recently dipped again, reflecting a decrease in market participation.
Dogecoin’s Struggle with Key Resistance: Will it Break $0.14?
Dogecoin’s key support zone is between $0.119 and $0.123, with a resistance zone around $0.139 to $0.143. A retest of the support level could provide a buying opportunity if the bullish market structure holds. The Mean Dollar Invested Age (MDIA) has been trending higher, indicating that older coins are staying in wallets and reducing market liquidity. This trend often precedes a strong price movement, as observed in previous market cycles. Additionally, the 90-day Market Value to Realized Value (MVRV) ratio suggests that Dogecoin is undervalued, reducing the risk of significant selling pressure from profit-takers.
Recent activity among large holders, specifically those with 10 million to 1 billion DOGE, shows initial accumulation followed by selling. This behavior indicates uncertainty among significant investors. The high correlation between Bitcoin and Dogecoin (+0.95) suggests that broader market trends could heavily influence DOGE’s price movements.
