Dogecoin whale activity and bullish technicals point to potential upside

Dogecoin rose over 20% last week, driven by strong bullish technical indicators, as whales accumulated more than $6 billion in DOGE.

According to analyst Ali Martinez’s X post, whales reportedly purchased over 1.08 billion DOGE on January 3; This amount was worth approximately $413 million at the time.

The next day, another whale transferred 5 billion DOGE, worth about $2 billion at the time, to an unknown address, becoming the fourth largest holder of the meme coin.

Data from analytics platform Santiment shows an increase of over a million dollars in whale transactions for Dogecoin last week.

Source: Santiment

Whale accumulation is often viewed as a major bullish signal for an asset because these wealthy players are often more skilled at identifying market trends and making timely investments in assets with long-term gain potential.

Memecoin’s daily active addresses also increased last week, indicating increased investor activity, which is generally considered an indicator of positive investor sentiment and strong network health.

Source: Santiment

Dogecoin attracted investor attention after Spirit Blockchain Capital, a publicly traded Canadian investment firm, announced plans to use DOGE assets to generate returns through a private network.

Another factor driving DOGE’s recent momentum is speculation regarding Elon Musk’s plans to launch a payment system on the X platform. Musk, a long-time advocate of Dogecoin, has previously shown his support by temporarily accepting DOGE for Tesla payments and frequently endorsing the meme coin on social media. Many people now speculate that DOGE will be included as a payment option in ‘X Money’ alongside Bitcoin and possibly other cryptocurrencies.

Meanwhile, open interest in DOGE increased by over 50%, indicating increased demand for the altcoin among derivatives traders. According to CoinGlass, DOGE’s OI increased from $2 billion on December 1 to $2.97 billion on December 6.

DOGE rally may continue DOGE 50-day and 200-day EMA — January 6 | Source: crypto.news

Technical indicators remain positive for DOGE; On the 1-day chart, DOGE price remains above the 50-day and 200-day Exponential Moving Averages, indicating that buyers are in control.

DOGE MACD and PPO chart — January 6 | Source: crypto.news

Moreover, the lines of the Moving Average Convergence Divergence and the price oscillator have turned upward; This generally indicates that DOGE may extend its rally in the coming weeks, possibly targeting resistance at $0.41; A break above this level could push it towards the 2024 high. $0.47.

Since January has historically been Dogecoin’s most profitable month, according to Coinglass, many market experts, including Alex Thorn, head of research at Galaxy Digital, are predicting that DOGE will potentially rise to the coveted $1 target by the end of 2025.

Dogecoin will eventually reach $1 and the world’s largest and oldest memecoin will reach a market cap of $100 billion. However, Dogecoin’s market value will be dwarfed by the Department of Government Efficiency, which will detect and successfully enforce cuts for amounts exceeding Dogecoin’s market value. pic.twitter.com/xcwRHhpMTn

— Galaxy (@galaxyhq) January 2, 2025

However, the rally may face some difficulties. According to Santiment, Dogecoin’s weighted social sentiment currently stands at -0.60, meaning many investors are currently pessimistic about its potential to rise in the short term.

This negative sentiment may pose a short-term hurdle, but it also presents an opportunity for contrarian traders to take advantage of the market’s cautious outlook.

At the time of writing, Dogecoin (DOGE) is up 20% in the last 7 days, outperforming Shiba Inu (SHIB), Pepe (PEPE) and other leading meme coins with a market cap of 56.5 billion. While it was at the dollar level, it changed hands and rose to 0.3825 dollars. During the same period, Bonk (BONK) recorded gains of 10%, 12.3% and 5% respectively.