Dogecoin: The Activity of Whales Indicates the Possibility of a Bear Trap?

The daily chart and the 4-hour chart of Dogecoin (DOGE) show very optimistic signs despite whales selling off, which implies the possibility of a price fall trap for retail investors. The response of Dogecoin at the medium-term trend line The daily Dogecoin price chart is trading slightly below a key downtrend line that has maintained this shape since the beginning of January 2025. The trend line has expanded from $0.4600 in January over four months until DOGE reached the range of $0.15500 to $0.17000. The price continuously hinders this trend line to create a negative price structure. Dogecoin has stabilized at around $0.16000, below the upward trend line, indicating hesitation before the anticipated breakout.

Daily gains and closes exceeding $0.17 indicate that the bearish trend has ceased to be valid while creating the possibility of a reversal. DOGE could reach a level of 0.21 dollars and has the potential to rise further to 0.24 dollars if it breaks the trend line. If DOGE encounters resistance at the level of $0.15500 and then continues to fall, the downward momentum could be stronger, leading to further declines to $0.13000 or lower. The medium-term trend line plays an important role for DOGE as its reaction will determine the next direction. Will the Wedge Breakout pattern continue to exist? A deeper analysis shows the breakout of the model when DOGE breaks out of the descending wedge pattern on the 4-hour chart, indicating the market is bullish. The price increased from $0.15100 after the breakout model confirmed the upward trend of DOGE continues until it reaches $0.15800. This price volatility creates lower highs and lower lows, then breaks through its boundaries, often signaling a bullish trend. The RSI has surpassed the essential level of 50 points. The downtrend has dominated for DOGE during this period as the RSI remained below 50 points until it reached $0.15.

If the RSI remains above 50, this could confirm a shift in momentum towards the positive direction, thereby reinforcing the bullish trend. The bullish trend could extend to $0.16200 and even surpass this level as long as DOGE stays above $0.1560. The price is likely to fall back to the level of $0.1510 from $0.1560 if DOGE cannot maintain its position above this level. This upward trend will be invalidated if the price falls below this point while simultaneously ending the breakout pattern, which could potentially reignite the previous downtrend. The pattern of the subsequent candles will determine whether this breakout can be sustained or not. Why are whales dumping DOGE? Despite positive signs, DOGE whales have witnessed a significant distribution of their coins. The total balance of whale-tier addresses reached 24.65 billion DOGE. The sell-off by whales refers to a potential bear trap as these seasoned traders are exiting even though the price of DOGE shows optimism. Over the past week, the total number of wallets holding 23.81 billion DOGE has seen a decrease of about 840 million DOGE, resulting in a loss of more than 570 million tokens.

The continuous fall in the balance from DOGE wallets of 10 million to 100 million occurs while the price is rising, which may indicate that the largest investors are selling off and are less committed. The Dogecoin market has witnessed these breakout patterns before short-term price corrections begin, especially when public interest in this token decreases. Analysis shows that whale selling activity may not disrupt the market as demand appears strong and unaffected. As of the time of writing, the current upward momentum of DOGE may continue as long as the price of this coin remains above the aforementioned level of $0.15. Moreover, the price of Dogecoin could enter a deeper correction if sellers continue to act if the price falls below $0.15. Whales may start to buy back or continue the current distribution model in the coming days.