Dogecoin price forms bullish reversal setup as whales buy and exchange balances drop

Dogecoin price has formed a bullish reversal pattern over the past two months, a breakout above which could likely lead to gains of nearly 65% in the coming weeks.

According to data from crypto.news, Dogecoin (DOGE) price dropped to a yearly low of $0.124 on Thursday, Dec. 18, morning Asian time, down 20.4% over the past month and 70% below its year-to-date high of $0.414 reached in January. Its market cap stood at $18.9 billion, significantly below its yearly high of $61.2 billion.

Dogecoin’s downtrend has been driven recently by investors turning risk-averse as the crypto market experienced significant volatility and a risk-off sentiment in late 2025, partly influenced by macroeconomic factors like Federal Reserve interest rate policy and an increase in U.S. unemployment rates, which led investors to rotate out of speculative assets.

As a meme coin, Dogecoin’s value is heavily influenced by social media buzz and celebrity endorsements, and less by real-world utility. Such speculative assets typically experience sharp corrections when the hype surrounding them starts to wane.

Despite this, a major catalyst has emerged that could improve investor sentiment for Dogecoin and potentially kickstart a recovery soon.

Per data from Nansen, over the past 30 days, the amount of tokens held by the top 100 addresses in terms of total DOGE holdings has increased by 9% to 48.53 million. Within this, whales have also increased their holdings by 61.1% during the same period to 1.54 million tokens.

Renewed whale accumulation suggests that bullish momentum may be gradually building, and if sustained, could pave the way for a potential reversal in Dogecoin price in the short term.

On the daily chart, Dogecoin price has formed a falling wedge pattern since mid-October. It is a bullish reversal pattern formed when price trends lower within a narrowing range, often signaling that selling pressure is starting to fade.

Momentum indicators like the RSI, which currently stands at a reading of 33 and is close to the oversold threshold, suggest that buyers could begin stepping back in as downside momentum weakens.

As reported by crypto.news earlier, Dogecoin price has also formed a double bottom setup, another telltale sign that sellers may be reaching exhaustion.

For now, a breakout above $0.145, which forms the key psychological resistance to watch, could push Dogecoin price to as high as $0.20, up over 65% from the current price.

A drop below the psychological support at $0.10, however, could invalidate the bullish outlook and lead to further downside pressure.