Dogecoin price drops 18%, but whale activity points to bullish outlook

The price of Dogecoin has dropped significantly this week, falling by more than 20% at one point. It fell from a high of $0.1321 on Saturday to a low of $0.1026 on Tuesday. Despite the sharp price correction, from the perspective of on-chain data and analysts, Dogecoin is still expected to maintain a bullish trend in the future.

On-chain indicators show bullish signals

Whale accounts holding large amounts of Dogecoin are still active during this decline, indicating that these large investors have not completely withdrawn and are still optimistic about the long-term development of Dogecoin. Santiment noted: “While Dogecoin is down 18% from last weekend’s highs, on-chain activity shows that whale accounts are still actively participating in the network and have not completely sold off their assets.

Technical analysis supports price recovery

From a technical analysis perspective, a bullish signal may be emerging on Dogecoin’s weekly chart – the MACD (Moving Average Convergence Divergence) is expected to form a bullish crossover. The past two times Dogecoin saw a bullish MACD crossover, the price increased by 90% and 180% respectively. A bullish MACD crossover occurs when the MACD line breaks above the signal line and is often seen as a key indicator of a market turning from bearish to bullish.

MACD is a commonly used technical indicator that consists of two lines: the MACD line and the signal line. The MACD line is the difference between the 26-period and 12-period exponential moving averages (EMA), while the signal line is the 9-period EMA of the MACD line. When the MACD line crosses above the signal line, it usually means the market trend has changed from bearish to bullish, which is a common buy signal.

Currently, Dogecoin’s daily chart is also showing a breakout from the descending channel, which provides support for further price recovery. A well-known analyst told 2.2 million fans on the Ushering in a new round of rise.