Dogecoin Faces Critical $0.17 Test Amid Whale Accumulation

Dogecoin’s price decline accelerated this week, with the cryptocurrency falling over 3% and testing the lower boundary of its ascending channel near $0.17. According to CoinDesk data, heavy selling during European trading hours pushed DOGE below $0.1720 on strong volume before the price stabilized. The $0.17 level represents a critical technical support zone that has historically triggered rebound rallies, making its defense crucial for the memecoin’s near-term prospects.

Technical indicators continue to reflect bearish momentum, with the daily Relative Strength Index (RSI) hovering around 41, indicating limited buying strength in the current market environment. The 20-day and 50-day exponential moving averages are acting as significant resistance barriers at $0.182 and $0.199 respectively, maintaining pressure on the short-term trend. This technical configuration suggests that Dogecoin remains in a vulnerable position, with the potential for further downside if the $0.17 support fails to hold.

Beneath the surface of Dogecoin’s price struggles, on-chain data reveals a fascinating divergence in whale behavior. While larger holders have been liquidating positions—selling over $700 million worth of DOGE—mid-tier whales holding between 100 million and 1 billion DOGE have been quietly accumulating. Since late October, these mid-tier wallets have increased their holdings by nearly 5 billion coins, representing a significant accumulation during a period of market weakness.

This divergence between whale cohorts suggests conflicting views about Dogecoin’s future prospects. The accumulation by mid-tier whales, despite the bearish price action and negative sentiment, indicates that some substantial market participants see value at current levels. This activity creates the potential for increased volatility ahead, as the conflicting positions between different whale groups could lead to sharp price movements depending on which side gains the upper hand in market dynamics.

Technical analysts are pointing to potentially bullish signals that contrast with Dogecoin’s current price weakness. The weekly chart shows a hidden bullish divergence pattern, where price is forming higher lows while the RSI forms lower lows. This technical setup often signals the end of a correction phase and can precede significant upward moves. If Dogecoin maintains support above $0.17, traders anticipate a potential 33% rally toward $0.22, which aligns with the 0.5 Fibonacci retracement zone.

Market structure also presents conditions ripe for a potential short squeeze. Current data shows short positions outweighing long positions by a 5:1 ratio, meaning any breakout above $0.188 could trigger forced buying from short sellers covering their positions. Adding to the optimistic scenario is speculation surrounding a potential Bitwise Spot Dogecoin ETF, which analysts believe could arrive before year-end if auto-approval rules apply. Such an event would represent a watershed moment for the memecoin, potentially injecting fresh liquidity and institutional exposure that could end Dogecoin’s months-long consolidation phase.

The combination of technical support at $0.17, hidden bullish divergence, extreme short positioning, and potential ETF approval creates a complex risk-reward scenario for Dogecoin. While the current quarter has been challenging, these factors suggest that the memecoin may be setting up for a significant move, with the direction likely determined by whether the critical $0.17 support level holds or breaks in the coming trading sessions.