Dogecoin Price Forecast: Increasing whale activity and Open Interest add to chances of a rally

• Dogecoin struggles to extend the V-shaped reversal run, overlooking the Golden Cross between two key moving averages.
• Large-wallet investors have purchased over 680 million so far in August, reaching the largest holding amount since December 1.
• Dogecoin Open Interest jumps by over 9% in the past 24 hours.

Dogecoin (DOGE) loses steam on Monday, reversing some gains up to $0.2417 earlier in the day, as it struggles to extend the V-shaped reversal run seen last week. Despite the recent decline, large-wallet investors continue to expand their holdings, and the DOGE Open Interest jumps by 9% in the last 24 hours. 

Dogecoin whales gain confidence

Large-wallet investors, commonly referred to as whales, are one of the few key catalysts fueling bull runs in crypto, especially meme coins. Typically, a surge in whale wallet balances is considered a buy signal as it reflects increased confidence of large investors. 

Santiment data shows that investors holding over 100 million DOGE tokens have purchased 680 million additional tokens since August 1. The total holding of these investors has reached 98.56 billion DOGE, the highest since December 1.

Dogecoin supply distribution. Source: Santiment

Capital inflows surge in DOGE derivatives

Dogecoin Open Interest refers to the total value of DOGE futures and open interest in US dollars. An increase in OI would indicate capital inflows as traders gain interest in the meme coin. 

CoinGlass data shows the DOGE OI rising over 9% in the last 24 hours, reaching $3.32 billion. 

DOGE Open Interest. Source: Coinglass

Dogecoin eyes to break out of a V-shaped reversal pattern

Dogecoin loses intraday gains as it reverses from the $0.2471 peak formed earlier on Monday, hinting at a bearish turnaround. The meme coin struggles to surpass the $0.2407 resistance level, marked by the July 27 close, which acts as the neckline of a V-shaped reversal pattern.

The V-shaped reversal in Dogecoin aligns with the renewed interest of large investors in the meme coin. However, a failure to surpass the neckline could result in a pullback to the $0.2145 level, marked by the May 17 close.

The technical indicators maintain a bullish incline as the Moving Average Convergence Divergence (MACD) line crosses above its signal line. Still, investors must remain cautious as the average lines remain flat. 

The Relative Strength Index (RSI) currently stands at 58 on the daily chart, above the midpoint level. This suggests a marginally greater buying pressure, with room for further growth. Furthermore, the Golden Cross between the 50-day and 200-day Exponential Moving Average flashes a textbook buy signal.

DOGE/USDT daily price chart.

Looking up, a decisive push above the $0.2407 neckline could extend the Dogecoin rally to the $0.2848 resistance, which was last tested on July 21.