A closely watched technical indicator, which accurately flagged Dogecoin’s recent price ceiling, has now reversed, presenting a potential short-term buying signal for the popular memecoin. The signal comes as larger investors, or “whales,” appear to be holding their positions, suggesting a period of market consolidation.
The Tom Demark Sequential Flashes Green
Market analyst Ali Martinez highlighted in a recent analysis on X that the Tom Demark (TD) Sequential indicator has completed a “buy” setup on Dogecoin’s hourly chart. This technical tool is designed to identify potential points of trend exhaustion and subsequent price reversals.
Source: X@ali_charts
The indicator’s credibility was recently bolstered when it formed a “sell” signal on Wednesday as Dogecoin’s price surged past the $0,22 mark. This signal, marked by nine consecutive green candles, correctly preceded a price pullback.
Following this correction, the indicator has now registered an opposing signal: a completed setup of nine red candles. Martinez noted that given the accuracy of the prior sell signal, this new formation suggests a bullish rebound could be imminent for Dogecoin. The key question for traders is whether this signal will prove as prescient as the last.
Whale Activity Remains Subdued
Adding another layer of context to the market, on-chain data indicates that major Dogecoin holders are currently adopting a wait-and-see approach. Analysis of the Supply Distribution metric from analytics firm Santiment reveals that wallets holding between 10 million and 100 million DOGE have shown negligible change in their balances.
| Source: @ali_charts on X
This sideways movement in whale holdings suggests that these significant market players are neither accumulating heavily nor distributing their assets. Such inactivity can point to a lack of strong conviction in either direction, potentially leading to reduced volatility or a period of price stabilization before the next significant market move.
DOGE Price Outlook
At the time of writing, Dogecoin is trading at approximately $0,215, reflecting a decline of over 3% in the past week. The price has been consolidating after its retreat from the $0,22 high.
While the TD Sequential indicator provides a technical basis for a short-term rally, the neutral stance from Dogecoin whales suggests that any upward momentum may be measured. Traders will be monitoring whether a catalyst emerges to spur these larger investors into action and confirm the bullish technical signal.
Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Investors should always conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions in cryptocurrencies, which are highly volatile and speculative assets.
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