Dogecoin Millionaires Buy Dips as Price Eyes 30% Rally

Dogecoin, the popular memecoin, has seen a significant price drop of over 70% since reaching a peak of $0.48 in December 2024. Despite this downturn, the wealthiest holders of Dogecoin have been actively accumulating the cryptocurrency during these price declines, showcasing their confidence in a potential rebound in the near future. Recent on-chain data from Santiment reveals that wallets holding at least 1 million DOGE have increased by 1.24% since early February, even as prices continue to fall. This accumulation trend is a strong indicator of bullish sentiment among large holders.

Rising Network Activity Signals Potential Recovery

In addition to the accumulation by large holders, there has been a notable surge in active addresses, reaching a four-month high. This increase in network activity suggests that more users are engaging with Dogecoin, which could be a sign of real adoption rather than mere speculative trading or panic selling. Historically, when large holders accumulate an asset while its price is declining, it often signals that they perceive the asset as undervalued and are positioning themselves for a future price rebound.

Historical Patterns and Price Recovery

A similar accumulation pattern was observed in November, which preceded significant price recoveries. Currently, Dogecoin is testing a crucial support confluence that includes a multi-year ascending trendline support and the 200-week exponential moving average (200-week EMA) around the $0.13 mark. This level has historically triggered strong bullish reversals, making it a critical point for traders and investors to watch.

Technical Indicators Point to Bullish Momentum

Furthermore, the Stochastic RSI, an indicator that measures momentum and overbought/oversold conditions, has shown a bullish cross in the oversold region (below the 0.30 reading). This crossover typically indicates that selling pressure is weakening, which is a positive sign for Dogecoin. In previous instances, such crossovers at low levels have preceded substantial price recoveries, including a remarkable 400% price rally in 2024 and an 88% gain in 2023.

Resistance Levels to Watch

The first major resistance level for Dogecoin lies near $0.22, which aligns with the 50-week exponential moving average (50-week EMA) and the resistance area observed in March-April 2024. If Dogecoin can break through this resistance, it could pave the way for further gains. However, if the cryptocurrency fails to hold the support confluence, the bullish setup may be invalidated, leading to a deeper correction toward $0.12, a level that served as support during the March-May 2024 period.

Investment Considerations

It is essential to note that this article does not provide investment advice or recommendations. Every investment and trading move carries inherent risks, and readers are encouraged to conduct their own research before making any financial decisions. The cryptocurrency market is highly volatile, and while the current indicators suggest a potential rally, market conditions can change rapidly.

In conclusion, Dogecoin millionaires are taking advantage of the current price dip, showing confidence in a potential rebound. With rising network activity and key technical indicators pointing towards bullish momentum, the memecoin could be on the verge of a significant price recovery. As always, investors should remain vigilant and informed as they navigate the ever-changing landscape of cryptocurrency.