Dogecoin has shown signs of recovery after a week of selling pressure and market instability. After slipping below the support zone of $0.1750 at the beginning of May, the meme coin's price rebounded strongly over the weekend. Analysts and chain indicators are beginning to signal the formation of a local bottom and the potential for a strong bullish reversal.
Dogecoin Breaks Downtrend Channel and Retests $0.175 Level
On the hourly chart, the DOGE price has escaped the defined descending channel, ending the short-term bearish trend that had pressured prices for several days.
The breakout occurred near $0.1720, a level marked by strong daily resistance. After the breakout, Dogecoin's price surged past $0.1750 and is currently consolidating just above that range.
This breakout pattern was first identified by Trader Tardigrade, who pointed out the bullish structure on the hourly timeframe. This move marks the first technical signal of DOGE's strength since being rejected from $0.182 at the end of April.
According to current support levels, $0.1685 and $0.1650 remain key bearish zones to watch. Meanwhile, resistance above lies at $0.1780, $0.1850, and the psychological level of $0.20. If these levels are cleared, analysts suggest a mid-term path could form towards $0.50 and beyond.
Long-term Analysts Point to Structural Bottom Formation on Dogecoin Price
Additional bullish signals have emerged from long-term chart followers. According to the CEO of Investments, the weekly DOGE/USDT chart shows clear higher lows and a trendline retest. The analyst shared a chart indicating the anticipated breakout could extend up to $1.16 in the next major price surge, if the current setup remains intact.
In agreement with this view, anonymous analyst Astronomer notes that the DOGE price may have hit a bottom after establishing support near $0.165. Compared to October 2024, when Dogecoin's price increased by over 500%, this analyst highlighted a similar structure currently forming. This argument is based on high timeframe market cycles, with altcoins often finding their lows shortly after Bitcoin.
Astronomer added that holding spot and identified risk zones near the current level makes DOGE's price an attractive asymmetric opportunity. The Relative Strength Index (RSI) on the 2-day chart also indicates a slight bullish divergence, often preceding trend reversals in such macro structures.
Whale Activity Raises Speculation About Accumulation
Recent on-chain data continues to support the possibility of new accumulation. A large transaction involving 100 million DOGE, worth about $17.5 million, was transferred to a private wallet earlier this week. This transfer coincided with an increase in outflows from exchanges, often interpreted as a bullish signal when funds are moved off-platform for long-term storage.
While some wallet groups continue to show distribution patterns, particularly those holding 10 million to 100 million DOGE, larger wallets have reversed their behavior. Wallets holding between 100 million and 1 billion DOGE have continued to accumulate since April 8.
The number of active addresses in the system has not increased significantly recently. Daily activity is only 3.4% of the peak from November 2023. Slow retail trading activity indicates that the retail market still faces numerous challenges, while larger investors are driving this latest price increase.
Data Shows the Discrepancy Between Market Cap Value and Realized Value
From the beginning of April to May 6, the market capitalization of Dogecoin increased from $21 billion to $26.4 billion. However, the realized capitalization, measuring the value of the coin based on its final fluctuating prices, has slightly decreased from $21.5 billion to $21.3 billion.
Specifically, this divergence implies that part of the recent price increase is driven more by speculative trading than by strong fundamental on-chain factors. The bullish trend is being held by confident holders rather than widespread retail demand, as long-term holders have not significantly increased selling activity.
According to technical analysts, a strong breakout will only occur when the DOGE price maintains above $0.1850 and reaches $0.20. A successful journey above $0.1850 will signal a path toward a technical retest from $0.28 to $0.30 and push the market toward $0.50 and $1.16 as all conditions turn bullish.