Dogecoin [DOGE] has rebounded significantly from the lower boundary of its trading channel over the past few months, igniting new bullish sentiment.
This technical rebound coincides with an increase in open interest by 15.78% to $2.09 billion and a surge in options trading volume by 402%, indicating that traders are actively positioning for further upward movement.
This move indicates increasing speculative interest, potentially targeting the mid-range resistance level of $0.19, and if momentum holds, it may continue towards $0.26.
Strong enough to reverse resistance?
DOGE's price has skyrocketed from the demand range of $0.13 to $0.15, and bullish pressure is increasing. The RSI has broken above 80, indicating that the upward trend may continue.
However, the downward resistance line around $0.19 still limits the price increase. A daily close above this trend line may indicate a breakout, triggering further bullish momentum.
Prior to this, DOGE was still in a technical squeeze between historical support and dynamic resistance.
Therefore, bulls must maintain buying pressure to challenge this overhead barrier and sustain momentum towards $0.26 in the short term.
With a strong positive influx of spot volume, whale activity is recovering.
After weeks of continued outflows, Dogecoin recorded a net inflow of $8.23 million at the time of writing, indicating renewed confidence among whales.
This influx signifies a significant shift in on-chain behavior, indicating that large holders are beginning to accumulate again.
Historically, such inflows are typically consistent with bullish reversals or mid-term rebounds. Therefore, this positive net inflow supports Dogecoin's recent technical bounce and may help maintain its trajectory toward $0.19.
However, if the inflow weakens again, the strong price movement may only be short-lived. Currently, on-chain whale activity reflects an improving market sentiment.
Dogecoin can release more upside potential in the following ways…
Dogecoin's MVRV Z score has rebounded to 0.355 after falling close to historical lows at the end of June.
This metric measures the profitability of holders relative to market value, indicating that DOGE is recovering from undervaluation.
Although the index remains below the bullish threshold, the sustained rise indicates that downside risk is diminishing. This shift could encourage over-the-counter participants to re-enter, thus increasing upward price pressure.
However, MVRV remains a lagging indicator, and the price must break through key resistance levels to validate market sentiment. Nevertheless, the continually rising Z score adds a bullish weight to Dogecoin's outlook.
Why has network activity lost momentum again?
Despite recent price rebounds, Dogecoin's on-chain activity has sharply slowed. As of July 3, the number of daily active addresses has fallen to 33,700, and the number of transactions has dropped to 14,800.
This marks a significant decline since both indicators surpassed 500,000 on June 22. The sharp shrinkage in usage suggests that retail interest is waning, which could undermine the current rebound's momentum.
However, Dogecoin's price has historically led market activity rather than followed it. Therefore, if the current bull market momentum continues, network participation may lag temporarily before accelerating growth.
Will DOGE reach $0.19 and break through?
Dogecoin's strong support, rising derivative participation, and a new round of whale inflows create favorable conditions for its continued rise.
However, success depends on whether bulls can break through the downward resistance level around $0.19. Although the MVRV Z score and net flow indicate an improving market sentiment, sluggish network activity dampens expectations.
If Dogecoin breaks through resistance with strong trading volume, it is expected to move towards $0.26. Before that, momentum remains uncertain, and bulls must stay active to maintain the upward trend.
