Leading meme asset Dogecoin (DOGE) has seen a steady price rise over the past two weeks, trading within an ascending parallel channel on the daily chart. Currently priced at $0.2605, the coin’s value has climbed 17% in the past 14 days, extending optimism across the meme coin market.
However, there’s a catch. A key momentum indicator has formed a bearish divergence, signaling that DOGE’s rally may lack organic support and could be due for a correction. Meanwhile, large holders, known as whales, appear to be slowing down their accumulation, further dampening the bullish outlook.
DOGE Price Strength Faces Test
While DOGE has posted double-digit gains in the past two weeks, its Chaikin Money Flow (CMF), a key indicator that tracks capital inflows and outflows, has declined, forming a bearish divergence. This momentum indicator is below the zero line at -0.08 at press time.
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A bearish divergence occurs when an asset’s price continues to climb while its CMF indicator trends downward. This means that less capital flows into the asset despite the price growth.
Such divergences typically precede pullbacks, suggesting that DOGE’s short-term momentum could weaken if buying activity does not recover.
In addition, on-chain data has revealed a drop in whale activity. According to Nansen data, large investors holding DOGE coins worth more than $1 million have reduced their supply by 1% in the past two weeks. At press time, this cohort of DOGE investors holds 4.43 million DOGE.
Whales play a crucial role in sustaining market momentum. When their demand declines during a rally, it often reflects a lack of conviction behind the price move. This could be a red flag for traders banking on continued upside.
Can New Demand Save the Meme Coin?
If buying pressure continues to wane, DOGE could face a short-term correction toward the lower boundary of its ascending parallel channel, potentially testing $0.2574 as near-term support. If this price floor gives way, the meme coin’s price could experience a deeper decline toward $0.2018.
On the other hand, if new demand enters the market, the coin could break above the upper line of its current channel, which forms resistance at $0.2797. If successful, DOGE price could reach for $0.2980.
