Dogecoin ($DOGE) Price Prediction: Whales Accumulate Amid Downtrend, TD Sequential Buy Signal Hints at Short-Term Rebound

Despite a series of downward price movements over recent weeks, technical indicators and whale activity are drawing attention as traders and investors closely monitor the cryptocurrency's behavior.

Dogecoin ($DOGE) price displayed a mix of signals on Dec. 27, 2024, suggesting a potential short-term rebound, though caution remained in the market.

Despite a series of downward price movements over recent weeks, technical indicators and whale activity drew attention as traders and investors closely monitored the cryptocurrency’s behavior.

A closer look at the Dogecoin 4-hour chart showed signs of a potential reversal in its downtrend. The TD Sequential indicator, a widely used tool in technical analysis, had presented a buy signal on the chart.

This indicator attempts to identify potential turning points in an asset's price trend by displaying a countdown of 13 candles, followed by a buy or sell signal on the 14th candle. In this case, the indicator shifted from a sell signal (denoted by a "9" on the chart) to a buy signal (denoted by a "1" on the chart), suggesting a possible price rebound.

The Dogecoin 4-hour chart showed a slight increase in its price to $0.31556, marking a modest 1.00% rise (+0.00312). The shift from red to green candles on the chart indicated that selling pressure might be subsiding, with the market possibly preparing for a short-term upward movement.

While the green candle signaled a potential buying interest, more data would be needed to confirm whether Dogecoin's price could sustain a rally or if the market would face further downward pressure. Investors would likely monitor subsequent price actions for any signs of stability or further declines.

Meanwhile, Dogecoin also saw whale activity in the past 48 hours. According to data from BitInfoCharts, large addresses, specifically those holding between 10,000,000 to 100,000,000 Dogecoin, had purchased over 90 million DOGE in total.

This accumulation of Dogecoin by whale addresses occurred as the cryptocurrency's price continued to decline. Since December 17, Dogecoin's price had dropped by around 20%.

Despite the overall price decrease, large investors appeared to be adding to their Dogecoin holdings. As of December 27, whale addresses collectively held over 34.4 billion DOGE, out of the total circulating supply of around 133.08 billion.

The buying spree by whales could be a sign of their confidence in Dogecoin's long-term prospects, even as the asset's price faced downward pressure in the short term. Whales may be taking a contrarian approach, buying at lower prices in anticipation of a future market rebound.

Two key technical indicators, the Bollinger Bands and the Moving Average Convergence Divergence (MACD), provided additional insights into Dogecoin’s short-term price action.

Currently, Dogecoin’s price was trading near the lower Bollinger Band, which traditionally indicated oversold conditions. This suggested that a price reversal could be on the horizon if the asset moved back toward the middle or upper bands.

The Bollinger Bands are a technical indicator that attempts to measure the volatility of an asset's price movements. The bands are typically plotted two standard deviations away from a simple moving average of the asset's closing prices over a specified period, usually 20 days.

When an asset's price trades close to the lower Bollinger Band, it could indicate that the asset is oversold and a potential price increase may occur as buying pressure builds up. However, if the price continues to fall below the lower Bollinger Band, it could signal further downward pressure in the market.

On the other hand, the MACD indicator showed a bearish signal with the MACD line below the signal line. However, the histogram bars were narrowing, indicating that the bearish momentum might be weakening.

The Moving Average Convergence Divergence (MACD) indicator is a momentum indicator that attempts to identify changes in the direction, strength, and duration of an asset's price movements. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, and then plotting the result against a 9-day EMA of the MACD line.

A bearish MACD signal typically occurs when the MACD line (blue line on the chart) crosses below the signal line (orange line on the chart), indicating a possible shift in momentum toward the downside. However, in this case, the MACD line was flattening out, suggesting a potential weakening of the bearish momentum.

Moreover, the narrowing histogram bars, which represent the difference between the MACD line and a 9-day EMA of the MACD, indicated that the bearish momentum might be losing strength. If the MACD line crosses back above the signal line, it could generate a bullish crossover, potentially indicating a shift in momentum toward the upside.