Peter Smith
Dogecoin (DOGE) shows signs of a potential rally despite recent weakness, with technical indicators suggesting the consolidation phase might be ending soon.
DOGE Price Drops 13% But Support Holds Strong
Dogecoin dropped over 13% this week after a solid 31% three-month rally. While DOGE looks stuck sideways, there's actually some bullish action brewing underneath that traders are missing.
The short-term holder NUPL crashed from 0.24 on July 20 to 0.06 on July 28, showing recent buyers either took small profits or started seeing losses. But this selloff hit a wall at $0.21, where 9.77 billion DOGE tokens are clustered. That's a massive support zone that's likely to hold.
Hidden Bullish Divergence Forms in DOGE Price Action
Here's the key signal: while DOGE's price has been making higher lows (buyers stepping in faster on dips), the RSI indicator has been making lower lows. This hidden bullish divergence usually appears during healthy pullbacks in bigger uptrends.
Since DOGE is still up over 30% in three months, this looks like a consolidation, not a reversal. The pattern suggests sellers are running out of steam while strong hands hold the line at support.
What DOGE Price Needs Next
Dogecoin is trading just under $0.23, caught between key levels. Bulls need to keep it above $0.21 and push back over $0.25 to confirm the bullish setup.
A break above $0.25 opens the door to $0.28. But if $0.21 support fails, DOGE could drop to $0.19 or $0.17, killing the bullish thesis. Given the massive buying interest at $0.21, the odds favor the bulls.
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Peter Smith
