The meme coin Dogecoin has experienced a significant discount following a sustained bearish trend since mid-September. However, several factors may indicate a potential reversal from its current position.
Recently observed spikes in Dogecoin exchange net position changes have contributed to rising bullish optimism around the meme coin. Historically, positive net position changes have been associated with bullish momentum, while negative figures have been linked to bearish momentum.
Interestingly, the Dogecoin exchange net position change has recently turned positive, potentially signaling an accumulation event.
This spike in exchange net position change could suggest that the DOGE price is in the early stages of a potential reversal. Furthermore, multiple other signals may reinforce this outlook.
Dogecoin Bears Cool Off Near its 12-Month Support Level
DOGE price has been forming its 12-month lower range near the $0.15 price level. This week, sell pressure has leveled out within this support zone.
The king of meme coins was trading at $0.158 at the time of observation.
In addition to sell pressure stabilizing at the long-term support, Dogecoin’s Money Flow indicator registered a slight uptick, confirming that buyers are acquiring DOGE coins at the support level.
At press time, the DOGE price represented a 48% discount from its September peak, a 67% discount from its 12-month high, and nearly 80% from its all-time high.
This suggests that Dogecoin proponents may find the current discounted prices attractive, leading to demand buildup at these levels.
The pullback on October 10 already demonstrated robust accumulation at lower prices, further supporting a bullish case for DOGE.
However, it is important to note that a bullish outlook does not necessarily shield DOGE price from further potential downside. Another capitulation event could still occur, given past occurrences, the bearish state of the market, and currently weak demand.
Dogecoin Demand Profile This Week
Whale outflows have dominated across many top cryptocurrencies in recent weeks, including Dogecoin. However, an analysis of whale order book flows suggests they may be accumulating positions after the recent discount.
According to Coinglass, whales acquired over $8 million worth of the meme coin in the spot market over the last three days across Coinbase, Binance, and OKX. This contrasts with previously observed whale outflows.
Whales have also shown bullish sentiment in derivatives markets, executing over $9 million worth of long positions on OKX and Binance futures during the same three-day period.
This rising demand from whales supports bullish expectations. However, these investments are relatively small and do not necessarily indicate aggressive buying.
Nevertheless, demand buildup from this cohort in the latter half of the week could provide a more concrete bullish case. Otherwise, DOGE price may continue to face sell pressure.
Market-wide forces indicate that spot outflows have cooled significantly. Dogecoin registered approximately $1.5 million in net spot outflows.
On the derivatives side, funding rates have returned to positive territory. Additionally, Dogecoin open interest has increased from less than $1.4 billion last week to $1.66 billion at the time of observation.
These findings reflect growing bullish confidence in Dogecoin, although relatively weak demand still suggests a cautious stance.