Dogecoin (DOGE) is showing early signs of a potential bullish reversal after suffering a sharp correction from the DOGE price’s recent high. A combination of technical indicators, bullish candlestick structure, and renewed accumulation by large holders is suggesting that the meme coin could be approaching the end of its latest pullback.
DOGE reached approximately $0.1007 on August 22 before reversing lower. The subsequent decline pushed the cryptocurrency down more than 17%, bringing its price toward the $0.0828 area. While the retracement has weakened short-term momentum, the decline has also brought the DOGE price closer to a major historical demand zone where buyers may attempt to regain control.
Also Read: DOGE Price Eyes $1 as Bullish Monthly Candle Sparks Reversal Hopes
TD Sequential Signals Possible Bottom
According to the crypto analyst Ali Charts, the most powerful technical indication would be a new buy signal on Dogecoin’s daily chart using the Tom DeMark Sequential indicator.
This is because the Tom DeMark indicator is supposed to detect any exhaustion in the prevailing trends, and therefore, a buy signal after a long downtrend may indicate weakening selling pressure.
Source: Ali Charts’ X Post
Even though this signal may not necessarily bring about an instant bounce, its occurrence at this particular point of DOGE’s correction might mean that the downtrend is coming to an end. Traders would certainly look out for some evidence of buying pressure to confirm this reversal signal.
The daily chart of Dogecoin is also forming the morning doji star pattern, which is a reversal pattern and usually forms after a phase of selling. It is an indication that there is a shift from bearish sentiment to market uncertainty and ultimately buyer domination.
Source: Ali Charts’ X Post
Dogecoin Whales Accumulate 400 Million DOGE
The technical indicators are now being supported by on-chain movements. Major investors of Dogecoin have allegedly bought up to 400 million DOGE over the last five days, indicating that large investors have taken advantage of the price decline for accumulating purposes.
Source: Ali Charts’ X Post
Such accumulation may become crucial when it takes place near an existing support level. Further whale buying may ease the sell-side pressure and create extra liquidity if the sentiment in the cryptocurrency markets changes for the better.
On-chain data also suggests that $0.0813 is an essential support zone for Dogecoin. A total of 35 billion DOGE was previously transacted in this zone, forming a significant accumulation of on-chain transactions.
DOGE Price Eyes $0.1774 as Bulls Defend Support
Short-term prospects for the DOGE price will be mainly determined by how successful the bulls are at holding onto the $0.0813 support region. Sustaining itself above this zone will help in keeping the reversal formation intact, and a breakdown will weaken the bullish pattern.
Source: Ali Charts’ X Post
Provided that there is stability and buyers get back into action, the next upside targets for the cryptocurrency will be $0.1552 and $0.1774. In order to get there, the DOGE price would have to reclaim the intermediary resistance levels.
At the moment, the combination of technical reversal indicators and whale accumulation makes the bullish case for the DOGE price much stronger, as the level of $0.0813 becomes very important.
Also Read: DOGE Price Prediction: Institutional Adoption Hints at a Strong Rally to $15
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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