Top memecoin by market cap, Dogecoin, has fallen by more than 21 percent over the past month as it mirrors the weakness observed in the wider crypto market. As of Thursday, the cryptocurrency is flashing a major buy signal which suggests a rebound could be near.
Dogecoin flashes bullish TD Sequential signal
On May 7, the 3-day chart of DOGE flashed the Tom DeMark (TD) Sequential sell signal which preceded a 31 percent correction in the memecoin, aiding its plunge from around $0.113 to $0.078.
To explain, the TD Sequential is a technical analysis indicator that aims to identify potential trend exhaustion and market turning points.
A buy signal typically appears after a prolonged decline, suggesting selling pressure may be fading, while a sell signal appears after a sustained rally, indicating that bullish momentum could be weakening.
According to the following chart shared by seasoned crypto analyst Ali Martinez, DOGE is now flashing a TD Sequential buy signal.
Besides the encouraging bullish sign shown by the TD Sequential indicator, there is renewed whale and institutional interest in Dogecoin. Over the past week alone, whales have accumulated more than 200 million DOGE tokens.
What’s interesting is the price level at which this accumulation occurred. According to the DOGE UTXO Realized Price Distribution (URPD) – a metric tracking the exact price levels where every circulating token last moved – more than 30 billion DOGE tokens were last transaction at the $0.081 level.
The following chart confirms this. The horizontal bar next to $0.081 shows a massive historical cluster of spot exposure, creating a strong psychological and financial wall for the digital asset.
Why is the $0.081 level important?
The importance of the $0.081 price level is also visible from a technical standpoint. As can be seen in the below chart, since its launch, Dogecoin has risen through multi-year consolidation channels. It has used these ranges to reduce volatility and transfer supply, before entering bull runs.
Currently, Dogecoin is testing the $0.081 level, which represents the lower mid-range boundary of a five-year parallel channel active since 2021. That said, just depending on technical patterns and on-chain metrics is not enough.
The wider crypto market needs to see a foundational change in sentiment, especially one that’s more risk-on and encourages memecoin speculation. Some hints were seen on May 8 when Solana-based UFO tokens rallied following the Pentagon’s release of ‘alien files.’
