Key takeaways:
Dogecoin whales offload large volumes of DOGE, signaling risk aversion.
Declining open interest and daily active addresses signal less demand for DOGE.
DOGE’s rising wedge pattern signals a bearish reversal with a 45% price drop potential.
Dogecoin (DOGE) price has dropped by over 24% after hitting a multimonth high of $0.28 on July 21. As a result, the memecoin’s largest holders have been offloading DOGE during recent price declines, indicating their lack of confidence in a potential rebound in the coming weeks.
Dogecoin onchain metrics hint at further losses
Investor interest in DOGE remains subdued based on derivatives data. Dogecoin’s futures open interest (OI) is down to $3.24 billion after peaking at $5.35 billion on July 22. An 8% decline since Sunday implies reduced speculative positioning and fewer traders betting on short-term price increases.
Wallets holding $10-$100 million DOGE have decreased by 6% since late July, Santiment data shows.
This reflects an earlier transaction flagged by Whale Alert that 900 million DOGE, worth over $200 million, was transferred to Binance by an unknown whale, raising concerns about short-term sell pressure.
Typically, when large holders distribute an asset while prices drop, it signals that they see risks of further declines.
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Meanwhile, the number of daily active addresses on the Dogecoin network has dropped significantly to 58,000 compared to a peak of 1.65 million in Q4/2024 and 674,500 in July, suggesting weak network activity.
A decrease in active addresses indicates lower user engagement on the network, possibly reflecting waning retail interest.
DOGE rising wedge pattern targets $0.12
From a technical perspective, sell pressure on DOGE could gain significant downward momentum if it breaks below a rising wedge pattern.
In technical analysis, a rising wedge is a bearish reversal chart pattern that comprises two converging trend lines that connect higher highs and higher lows. This convergence indicates that the bulls are losing momentum.
DOGE price is currently retesting the support provided by the lower trendline of the wedge at $0.218.
A break below this level will likely trigger a deeper drop in price, with a technical target of the wedge at $0.12, a 45% decrease from current prices.
The relative strength index (RSI) also shows weakness, falling to 49 from overbought conditions at 85 on July 20, indicating that bearish momentum has been steadily building up.
As Cointelegraph reported, DOGE price must hold above the $0.19-$0.20 zone, or the 100-day and 200-day moving averages, to avoid further losses toward $0.16.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
