Important points:
On-chain data shows that short-term holders are accumulating despite the volatility.
The technical pattern mirrors past bullish cycles for Dogecoin and suggests a breakout to $1.60 by Q1 2026.
Dogecoin (DOGE) plummeted on Friday, with a sudden 66% flash crash that saw its price plummet from $0.25 to $0.08. Despite the rapid recovery to $0.20, this move wiped out over $365 million in long positions, more than four times the previous annual high of $89 million in long liquidations. While leveraged markets have suffered a massive reset, spot traders may be taking advantage of the situation.
On-chain data suggests that DOGE’s long-term fundamentals remain resilient even after a liquidation event. Joanne Wesson, CEO of Alpharaktal, said DOGE has not yet entered the “euphoria” stage and short-term holders are steadily increasing. The analyst said DOGE just reached the cycle top in December 2024 on the CVDD alpha indicator. The CVDD alpha indicator is a tool based on cumulative days of value destruction used to identify cycle peaks and troughs.
Although the 2024 top was relatively weak in terms of on-chain interest, Wesson emphasized that the model accurately captures all DOGE tops since 2016.
Recent Hodl Waves data shows that an increasing proportion of DOGE’s supply is held by investors with coin ages of up to six months, a sign of an influx of new speculative capital. Historically, this has been a precursor to rising prices, as new capital entering the market raises the cap on DOGE realizations. In support of this, the MVRV Z-score remains well below the euphoric levels last seen in 2021, indicating that the market is still in its early expansion phase.
Meanwhile, CryptoQuant data showed that retail positioning remains neutral and there are no signs of speculative frenzy. The current balance of retail participation is neither overheated nor indifferent, but reflects an environment where accumulation typically outweighs hype.
This phase often precedes widespread retail inflows, suggesting DOGE’s ongoing bull market may still have room to expand before peaking.
Related: Cryptocurrencies ‘get a passing grade’ after weekend crash: Bitwise’s Matt Hogan
Uncertainty could be a bullish signal for DOGE
Sentiment surrounding DOGE appears to have turned cautious after the flash crash, but it is precisely this uncertainty that has been one of the strongest bullish signals in history.
Cryptocurrency trader EtherNasyonal observed that all significant DOGE rallies in history began after sustaining above the 25-day moving average, breaking a long-term downtrend, and entering a retest phase. The trader said that all these conditions are now in place, noting that DOGE tends to start to rally significantly in situations of distrust and market fatigue.
Similarly, market analyst Trader Tardigrade highlighted that DOGE’s current structure reflects the 2014-2017 bull cycle, suggesting a breakout rally could follow and aim for $1.60 by early 2026.
Related: Data shows 76% of retail traders are long SOL: Will it bounce back to $200 hold?
