Dogecoin (DOGE) is showing signs of a bullish continuation despite facing a recent $40 million sell-off by large holders. The meme token, which has been consolidating just below the $0.26 resistance level, continues to hold a positive technical structure that analysts say could fuel a breakout toward the $0.35–$0.45 range within days.
On-chain data from IntoTheBlock and Lookonchain confirms that approximately 170 million DOGE, worth over $40 million, was offloaded by Dogecoin whales between May 17 and May 20. Although the sudden liquidity injection might seem bearish, traders and analysts believe it’s a preparatory phase before a renewed rally.
Technicals Show Classic Bull Flag Formation
The token has shed about 18% from its recent local high of $0.285 on May 10, currently trading at $0.22. Still, market participants see the pullback as part of a bull flag pattern forming since early April. According to CoinDesk Research’s technical dashboard, the setup remains structurally bullish as long as DOGE maintains support above $0.218.
A break above $0.26 could quickly accelerate to $0.35 or more, especially with meme coin trading sentiment rebounding. This emphasizes the importance of higher lows and decreasing sell-side pressure in confirming bullish continuation.
Intraday charts also highlight multiple short-term support zones, particularly between $0.227 and $0.228, where buyers have stepped in following sharp corrections. Resistance has formed around $0.233–$0.234, a key level where profit-taking appears to be concentrated.
Dogecoin Whales Activity, and Derivatives Point to Upward Pressure
The exit of large Dogecoin Whales, most notably from wallets tagged by Lookonchain, sparked speculation about potential market weakness. However, previous DOGE cycles suggest that such moves often precede high-volatility upward swings, especially during consolidation phases.
Open interest in DOGE futures across Binance and Bybit rose 9% over the last 72 hours, per Coinalyze, signaling fresh long positions. Meanwhile, funding rates turned mildly positive, suggesting bullish sentiment is gradually returning.
Market sources say traders are placing leveraged bets on an upside breakout, likely anticipating another wave of meme coin enthusiasm. However, it is worth noting that any breakout attempt without increased volume above $0.26 could result in a failed rally.
The options market also shows a growing skew toward out-of-the-money calls expiring in late May and early June. Deribit data shows a concentration of strike prices at $0.30 and $0.35, consistent with trader expectations of a near-term breakout.
DOGE in the Broader Meme Coin Context
Dogecoin’s technical positioning is being mirrored across other meme tokens. Shiba Inu (SHIB), Pepe (PEPE), and Floki (FLOKI) have also entered consolidation ranges with decreasing volatility, often a precursor to major movements.
Santiment’s May 20 report emphasized that meme coin activity often leads broader altcoin market cycles. The firm wrote,
The memecoin rally of April saw DOGE spike by over 50% in a matter of days, largely driven by renewed community activity and macro tailwinds such as Bitcoin ETF flows and improved liquidity conditions across U.S. markets.
Conclusion: Price Outlook and Timing
Technical models and social indicators suggest that the coming week could define DOGE’s near-term trend. Analysts project a window between May 22 and May 28 as critical for confirmation of a breakout.
If DOGE manages to flip the $0.26 level into support with strong volume, it opens the path toward $0.35, and possibly even $0.45, a level last seen during the early 2021 bull run. Failure to break this threshold, however, could lead to another test of the $0.218 support zone.
Still, sentiment remains optimistic. With meme coin narratives gaining traction and speculative capital returning, Dogecoin appears well-positioned for its next leg up, pending confirmation from price and volume.
FAQs
Why did whales sell $40 million in DOGE recently?
Dogecoin Whales offloaded roughly 170 million DOGE as part of a likely profit-taking cycle following recent gains. However, such sell-offs often precede renewed accumulation and rallies.
What technical pattern is Dogecoin currently forming?
Dogecoin is exhibiting a bull flag pattern, which typically indicates a continuation of an upward trend following a consolidation period.
What price levels should traders watch?
Key support is around $0.218–$0.220, while resistance sits near $0.26. A breakout above this level could send DOGE toward $0.35 or higher.
How are derivatives markets reacting to Dogecoin?
Open interest in DOGE futures has increased, and funding rates are positive, suggesting that traders are positioning for potential upside.
Glossary
Bull Flag: A chart pattern that signals a continuation of a strong upward price trend.
Resistance Level: A price point where an asset faces selling pressure.
Support Level: A price zone where buying interest typically prevents further declines.
Whales: Investors or entities holding large quantities of a cryptocurrency.
Open Interest: Total number of open contracts in derivatives markets.
Sources
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