Dogecoin Faces 14% Decline, But Whale Activity Signals Possible Price Reversal

Dogecoin (DOGE) has seen a significant drop of 14% over the past two days. This decline has erased the gains it made at the end of September. As a result, some investors are wondering where the meme coin is headed next.

However, not all hope is lost. Crypto whales are showing signs that they might be preparing for a price reversal. This could mean a buying opportunity for savvy investors.

The price-DAA (Daily Active Addresses) divergence indicator is flashing a buy signal for Dogecoin. Even though the price has fallen, the number of active investors on the Dogecoin network is increasing. This suggests we might be entering an accumulation phase.

Typically, when a cryptocurrency's price drops while activity rises, it indicates that investors are getting ready for a potential rally. This uptick in activity aligns with the growing sentiment that Dogecoin could be primed for accumulation. Investors are taking advantage of the lower prices, and this increased activity might mean that Dogecoin is starting to recover, despite the recent correction.

Dogecoin’s overall momentum supports this positive outlook. Whale addresses, which hold at least 0.1% of the circulating DOGE supply, are capitalizing on the lower prices. In just the last 24 hours, these whales recorded net inflows of 417 million DOGE, valued at around $45 million. This is the largest inflow in nearly a month, showing that large holders believe in a potential price bounce.

Whales often play a crucial role in influencing cryptocurrency prices. Their recent activity reflects growing confidence in Dogecoin’s recovery. These significant inflows highlight the possibility of a rebound soon as these key market players position themselves for a potential rally.

Currently, Dogecoin is trading at $0.107 after failing to break through the resistance level at $0.130 over the weekend. It is now testing a critical resistance at the $0.108 price point. Turning this level into support is essential for starting a recovery.

If Dogecoin can establish $0.107 as support, the next challenge will be overcoming the $0.118 resistance. Successfully crossing this threshold could pave the way for a rally toward $0.130, indicating a stronger recovery for DOGE.

However, Dogecoin has faced consolidation several times between $0.107 and $0.094. If DOGE fails to hold the support at $0.107, it could lead to further consolidation and repeat historical patterns. This would invalidate the current bullish outlook and delay the expected recovery, leaving investors waiting for a more significant turnaround.