Dogecoin (DOGE) has seen a dramatic price decline of over 70% since reaching $0.48 in December 2024. However, the largest holders of the memecoin are taking advantage of this drop, accumulating more DOGE and signaling confidence in a potential rebound.

Onchain Metrics Suggest a Price Recovery

Despite the recent downtrend, onchain data from Santiment suggests that Dogecoin may be gearing up for a comeback. Wallets holding at least 1 million DOGE have increased by 1.24% since early February, even as prices continued to decline.

At the same time, active addresses on the network have surged to a four-month high, indicating rising engagement and potential retail interest. Historically, an increase in large-holder accumulation combined with higher network activity often signals undervaluation and a potential price reversal.

This trend mirrors a similar pattern observed before DOGE’s 200%+ rally in November 2024, suggesting that the memecoin could be preparing for another surge.

Oversold Conditions Hint at 30% Rally

Dogecoin is currently testing a critical support level, formed by a multi-year ascending trendline. This level has historically triggered strong bullish reversals and aligns with the 200-week exponential moving average (200-week EMA) at approximately $0.13.

Additionally, the Stochastic RSI—an indicator measuring momentum and overbought/oversold conditions—has formed a bullish crossover in the oversold region, below the 0.30 reading.

• This indicator suggests that selling pressure is easing, creating conditions for a potential price rebound.
• In past cycles, similar signals have preceded a 400% rally in 2024 and an 88% increase in 2023.

Key Resistance and Downside Risks

If the bullish outlook holds, DOGE’s first major resistance level lies near $0.22, aligning with its 50-week EMA and the March-April 2024 resistance area.

However, if Dogecoin fails to hold its current support confluence, the bullish setup could be invalidated. This could lead to a deeper correction towards $0.12, a support level from the March-May 2024 period.

For now, Dogecoin’s largest investors appear to be betting on a strong recovery, but whether the memecoin can sustain upward momentum depends on broader market conditions and continued user engagement.