The price of Dogecoin remains stable while the chart shows a 30% recovery potential

Over the past seven days, the price of Dogecoin has decreased by approximately 1% and has shown little significant daily fluctuation. On a monthly timeframe, DOGE still records a decline of about 2.5%. This development continues to keep market sentiment cautious, although the overall cryptocurrency market remains quite stable.

However, sideways movement does not mean the market is completely “silent.” In Dogecoin, some positive signals are gradually forming beneath the surface, hinting at a potential reversal in the near future.

Familiar signals are returning on the Dogecoin chart

The first observable sign comes from the price chart and RSI indicator. Between 18/12 and 25/1, DOGE formed lower lows, while RSI created higher lows – a phenomenon known as bullish divergence. This indicates that selling pressure is weakening, even though the price has not yet broken out significantly.

Dogecoin previously exhibited this pattern at the end of December, when the RSI indicator touched the old lows, creating a divergence. Subsequently, DOGE surged approximately 35% in a short period. However, this does not guarantee that the same scenario will repeat.

An important point is that the market previously reacted positively to this signal. Currently, DOGE continues to stay stable, while momentum is quietly improving.

A slight recovery has begun, but there is not enough evidence to confirm an uptrend. To do so, DOGE needs to break through a key short-term technical level.

20-day EMA: The decisive boundary for trend direction

From a technical perspective, Dogecoin’s next step is to regain its position above the 20-day EMA. The last time DOGE crossed this threshold was on 2/1, resulting in a nearly 20% increase in a short period. This move was part of the previous 35% recovery.

Currently, Dogecoin is trying to replicate this scenario. The bullish divergence has laid the groundwork, and breaking above the 20-day EMA will serve as the “alarm bell” traders are waiting for.

The important EMA for Dogecoin’s price | Source: TradingView If DOGE remains below the 20-day EMA, the market will continue to stay cautious. Conversely, if the price breaks above and holds above this level, upward momentum could return faster than expected. Here, on-chain data will play a role in reinforcing what the technical chart is reflecting.

Large capital flows are quietly returning

On-chain data shows that Dogecoin holders are not rushing to sell. Since 26/1, the amount of DOGE in movement has dropped sharply from around 158 million to 41.9 million DOGE. A decrease in transaction volume often indicates that investors are waiting, reducing selling pressure accordingly.

Notably, small whales are quietly increasing their positions. The balance of wallets holding from 1 DOGE to 10 million DOGE has slightly increased from 10.95 billion to 10.96 billion DOGE. Although the increase is modest, this trend suggests growing optimism is returning.

DOGE activity decreases | Source: Santiment These holders are not following the price trend but are choosing to accumulate during sideways markets – consistent with the bullish divergence signal on the chart.

Derivatives data also indicates that risk is well-controlled, with short positions still dominating over longs. This helps limit the risk of a squeeze and reduces the likelihood of a sharp price decline if an upward move occurs.

Price levels to watch in the near future

Dogecoin’s bullish trend has begun, but clear confirmation is needed. If DOGE decisively breaks above the 20-day EMA, the price could reach the $0.158 zone – roughly a 30%-35% increase from current levels, aligning with the most recent recovery.

Conversely, if the price drops below $0.117, the bullish scenario will be invalidated. This is the critical boundary determining the feasibility of the trend.

Dogecoin price movement | Source: TradingView Currently, Dogecoin’s price is not yet very strong but has become more stable. Selling pressure has significantly decreased, momentum is improving, and whales are maintaining their positions. A 30% recovery is entirely possible, provided DOGE regains control of the short-term trend and sustains the current support.