Dogecoin (DOGE) is showing early signs of a potential recovery, trading above $0.070 at the time of writing on Tuesday.
Although the meme coin remains below its key moving averages, a bullish divergence in momentum indicators suggests that selling pressure may be weakening.
Growing whale accumulation and improving derivatives-market data also support a cautiously bullish outlook. However, Dogecoin must overcome several significant resistance levels before confirming a sustained reversal.
Dogecoin whales buy the dip
Large Dogecoin holders have continued accumulating tokens during the latest market weakness, according to Santiment’s Supply Distribution data.
Wallets holding between 10 million and 100 million DOGE have collectively purchased approximately 180 million tokens since Saturday.
The accumulation indicates that some large investors are taking advantage of DOGE’s recent price decline to expand their positions.
In contrast, wallets holding between 100,000 and one million DOGE sold around 10 million tokens over the same period.
The difference between the two groups suggests that larger holders remain confident in Dogecoin’s longer-term prospects despite its weak short-term price performance.
Continued whale buying could help absorb selling pressure and provide support for a potential rebound.
Dogecoin’s derivatives metrics are also showing improving sentiment among traders. CoinGlass data shows that DOGE’s long-to-short ratio rose to 1.0803 on Tuesday, marking its highest level in more than a month.
A ratio above one indicates that more traders are holding long positions than short positions, suggesting that market participants increasingly expect the price to rise.
Dogecoin’s funding rate has also strengthened. The rate turned positive on July 24 and has since climbed steadily to 0.0092%.
Positive funding rates mean traders holding long positions are paying those with short positions to keep their contracts open. This generally signals stronger demand for bullish leveraged positions.
While the data supports a positive near-term outlook, rising long exposure can also increase the risk of liquidations if DOGE falls below its key support levels.
Dogecoin price shows bullish divergence
The DOGE/USD daily chart remains bullish as Dogecoin is consolidating around $0.070, holding slightly above the psychologically important support level.
However, the cryptocurrency remains below its major Exponential Moving Averages, keeping the broader technical outlook bearish.
The 50-day EMA at approximately $0.074 represents the nearest dynamic resistance. DOGE also remains below its 100-day EMA at $0.081, reinforcing the broader downside trend.
Despite this bearish structure, momentum indicators are showing signs of improvement. Dogecoin has formed a bullish divergence with the Relative Strength Index on the daily chart.
DOGE established a lower price low on August 1, while the RSI produced a higher low during the same period.
This pattern suggests that bearish momentum is losing strength even as the price remains near its recent lows.
Bullish divergences can precede a recovery, although they do not guarantee that a reversal will occur.
If Dogecoin begins a recovery, the 50-day EMA near $0.074 will serve as the first major resistance level.
A break above that moving average could allow DOGE to test the descending trendline around $0.076.
Sellers may attempt to defend this area, making the $0.074–$0.076 range an important obstacle for buyers.
A decisive close above the trendline would strengthen the short-term bullish outlook and potentially open the path toward the 100-day EMA at $0.081.
Beyond that level, DOGE could target the horizontal resistance at $0.088. Buyers would need to overcome both barriers to confirm a more sustainable bullish reversal.
On the downside, the psychological $0.070 level provides Dogecoin’s immediate support.
If DOGE loses this floor, the yearly low at $0.067 would become the next key level to watch.
A daily close below $0.067 would invalidate the emerging recovery thesis and increase the risk of a deeper decline toward the psychological support at $0.065.
For now, whale accumulation, positive derivatives metrics and bullish momentum divergence suggest that Dogecoin’s selling pressure is weakening.
However, a breakout above $0.076 remains necessary to provide stronger confirmation of a recovery.
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