Whales Exit DOGE as Falling Demand Pressures Price Outlook

Dogecoin is once again at a critical stage, as its largest holders reduce their exposure, while market signals indicate further downside risk. DOGE, the meme coin that surged to a multimonth high earlier this summer, now faces strong selling pressure, declining network activity, and bearish technical patterns that could push its price much lower.

Whales Offload DOGE Amid Weak On-Chain Activity

Dogecoin has fallen more than 24% since reaching $0.28 on July 21, with whales taking steps to reduce their holdings. Data from Santiment shows that wallets containing between $10 million and $100 million in DOGE dropped by 6% since late July. This reduction suggests large holders are limiting their exposure during the recent downturn.

A transaction spotted by Whale Alert revealed that 900 million DOGE, valued at over $200 million, was moved to Binance. Such large transfers often increase market concerns about added selling pressure. When whales send tokens to exchanges during a price decline, it usually signals an expectation of further weakness.

Open interest in Dogecoin futures has also decreased. According to CoinGlass, futures OI has fallen from $5.35 billion on July 22 to $3.24 billion in late August. This 8% decline since Sunday reflects lower speculative activity, with fewer traders taking positions on short-term gains.

At the same time, daily active addresses on the Dogecoin network have dropped sharply. Glassnode data shows that the figure has fallen to about 58,000, down from 674,500 in July and 1.65 million in late 2024. This decline suggests a decrease in participation from retail investors.

Technical Patterns Suggest Potential for Deeper Declines

From a technical perspective, Dogecoin’s price action is shaped by a rising wedge pattern. This formation, defined by converging trend lines with higher highs and higher lows, is commonly seen as bearish when momentum fades. DOGE is now testing the lower boundary of the wedge around $0.218.

If the price breaks below this support level, technical analysis suggests a potential drop to $0.12. This target would mark a 45% decline from current trading levels. Analysts warn that the failure to hold the wedge support could bring a wave of selling activity.

Momentum indicators also point to weakness. The relative strength index (RSI) has fallen from 85 in late July to around 49, showing reduced buying pressure. A sustained move lower in the RSI may reinforce the possibility of further declines.

Market observers note that a continued lack of demand, combined with whale offloading, creates conditions where bearish signals could dominate. The decline in active addresses and exchange inflows further supports the possibility of ongoing downside risk.

Consolidation Offers Breakout Potential but Resistance Remains Key

Despite bearish signals, analysts also point to short-term consolidation that could lead to a breakout. Dogecoin has been trading in a narrow range between $0.20 and $0.24, forming what some chart watchers describe as a symmetrical triangle. Such patterns often precede sharp moves in either direction.

Ali Martinez, a well-followed analyst, noted that “a clean break above $0.23–$0.24 with volume could open targets like $0.25–$0.30.” He added that a potential run to $0.36 is possible if momentum builds and buyers reclaim control. However, he also warned that failure at this level could quickly push DOGE back to $0.21.

Other analysts have pointed to the stochastic oscillator and MACD indicators, which are showing mixed signals. The MACD line has crossed above the signal line, hinting at some bullish momentum, though the histogram remains neutral. The stochastic indicator also suggests that oversold conditions could trigger a rebound toward resistance.

Analysts suggest a potential DOGE breakout hinges on whales halting their sell-offs and a rebound in retail participation. CoinGlass data shows exchange outflows have exceeded inflows for most of August, signaling reduced short-term selling pressure.