Bearish Divergence Casts Shadow on Dogecoin’s 17% Rally as Whale Demand Dips

Dogecoin (DOGE) has posted a strong 17% price increase over the last two weeks, trading within an ascending parallel channel. However, this momentum is facing a critical test as key on-chain and technical indicators flash warning signs. A bearish divergence on the Chaikin Money Flow (CMF) coupled with declining accumulation from whales suggests the rally lacks organic capital support, potentially setting the stage for a short-term correction.

⚠️ Technical and On-Chain Red Flags

Despite DOGE trading at approximately $0.2605, technical analysis reveals two distinct signs of weakness that could jeopardize the upward trend: Bearish CMF Divergence: The Chaikin Money Flow (CMF) indicator, which tracks capital inflows, has been declining and sits below the zero line (-0.08). This has created a bearish divergence because the price is climbing while the capital flow is decreasing, indicating that less new money is supporting the rally. This lack of organic buying strength often precedes a price pullback.Declining Whale Demand: On-chain data from Nansen shows that whales (large investors holding over $1 million in DOGE) have reduced their collective supply by 1% over the past two weeks. This drop in demand from crucial large holders reflects a lack of conviction in the rally's continuation and serves as a major red flag for sustained upside.

💰 Key Price Levels and Correction Risks

The divergence suggests that Dogecoin's price strength is facing an imminent test, making the next few sessions crucial: Near-Term Support: If buying pressure continues to wane, DOGE is likely to retreat toward the lower boundary of its ascending channel, testing the near-term support at $0.2574.Deeper Correction Risk: Should the $0.2574 price floor fail to hold, the meme coin could face a deeper decline toward $0.2018, effectively invalidating the optimistic short-term outlook.Upside Potential: For the rally to continue, renewed demand must enter the market to push the coin above the channel's upper resistance line at $0.2797. A successful breakout here could lead to a target of $0.2980.

📌 Conclusion: A Fragile Rally Under Scrutiny

Dogecoin's 17% surge has fueled optimism in the meme coin sector, but the hidden technical weaknesses cannot be ignored. The combination of a bearish divergence in capital flow and waning demand from whales suggests the current price rise is fragile. The continuation of the rally is contingent upon a sudden influx of buying activity; otherwise, the market should brace for a likely correction back toward key support levels.

🔐 Disclaimer

This information is a summary of technical analysis and commentary from a BeInCrypto article and is for informational purposes only. It does not constitute financial or investment advice. Dogecoin is a highly volatile cryptocurrency, and the observed technical signals are not guarantees of future performance. You must always conduct your own thorough research (DYOR) and consult with a professional financial advisor before making any investment decisions.

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