Dogecoin Plummets 70% as Whales Accumulate, Signaling Potential Rebound

Dogecoin (DOGE) has experienced a significant price decline, dropping by over 70% from its peak of $0.48 in December 2024. Despite this downturn, the wealthiest holders of the memecoin have been actively accumulating DOGE during the price drops, signaling their confidence in an impending rebound. This accumulation trend is evident from onchain data, which shows that wallets holding at least 1 million DOGE have increased by 1.24% since early February, even as prices continued to fall. Concurrently, active addresses on the Dogecoin network have surged to a four-month high, indicating heightened network activity and potential retail interest.

Historically, when large holders accumulate an asset during price declines, it often signals their belief in the asset's undervaluation and positions them for future gains. The increase in active addresses suggests growing engagement on the network, which could be driven by real adoption rather than speculative trading or panic selling. This pattern was previously observed during DOGE’s 200%-plus price rally in November, where similar onchain activity preceded a significant price recovery.

Currently, Dogecoin is testing a critical support level, which includes a multi-year ascending trendline support and the 200-week exponential moving average (200-week EMA) at around $0.13. This support level has historically triggered strong bullish reversals. Additionally, the Stochastic RSI, an indicator measuring momentum and overbought/oversold conditions, shows a bullish cross in the oversold region. This signal typically indicates that selling pressure is weakening and has preceded strong price recoveries for DOGE in the past, including a 400% price rally in 2024 and 88% gains in 2023.

The first major resistance level for DOGE lies near $0.22, aligning with the 50-week exponential moving average (50-week EMA) and the March-April 2024 resistance area. If DOGE can hold this support confluence, it could pave the way for a 30% rally. However, if the support level is breached, the bullish setup could be invalidated, leading to a deeper correction toward $0.12, which served as support in the March-May 2024 period.

The strategic buying by Dogecoin millionaires during price dips reflects a bullish sentiment towards the cryptocurrency. This move suggests that these investors are confident in the long-term potential of DOGE, despite the recent volatility. The growing acceptance and use cases of Dogecoin, along with the backing of influential figures in the crypto community, contribute to the optimism surrounding the memecoin. As the market continues to evolve, the actions of these wealthy investors could serve as a barometer for the future performance of Dogecoin, potentially driving its price higher in the coming months.