Dogecoin (DOGE) Faces 7.5% Dip Amid Rising Interest in New PUMP Token, but 130% Rally Potential Remains

Dogecoin (DOGE) is experiencing a notable decline today, with a drop of approximately 7.5% over the past 24 hours, alongside trading volumes reaching around $2.5 billion, primarily driven by selling activity. This downturn coincides with a growing interest in the newly launched PUMP token, which appears to be diverting traders’ focus away from established meme coins like Dogecoin. Nevertheless, despite the current bearish sentiment, technical indicators suggest that Dogecoin could still potentially see a rally of around 130%, targeting a price of $0.45.

The price of Dogecoin has been forming a double bottom pattern over the past eight months, a technical structure that generally signifies a potential reversal from a bearish trend to a bullish one. Should DOGE surpass the resistance level of $0.26, this pattern will gain further confirmation. Currently, the price is approximately 30% away from this crucial resistance point. A shift in broader market sentiment toward bullishness could propel Dogecoin to this level, setting the stage for a price surge to around $0.47, which would yield significant gains for early investors.

The viability of this bullish pattern hinges on sustained buying pressure, which has been evident over the past week. However, should buyers retreat, the forecast for Dogecoin could quickly turn bearish, particularly if the price fails to break above the $0.26 resistance threshold. Technical analysis using the Relative Strength Index (RSI) also indicates a significant barrier at $0.19 that must be overcome to maintain upward momentum. Without the RSI crossing above the 50 mark, DOGE may remain trapped below its neckline resistance level.

Adding complexity to Dogecoin’s potential rally is the recent introduction of the PUMP token on various exchanges. Despite facing a slight decline of around 12% in the last 24 hours, the token has attracted significant trader interest. The popularity of the Pump.fun meme coin launchpad has led traders to anticipate that PUMP could experience gains, which may divert buying activity away from Dogecoin and hinder its price performance.

Data from Lookonchain reveals that a prominent whale wallet, known for acquiring new tokens, has invested around $2 million in PUMP within the last 24 hours. Additionally, on the Hyperliquid platform, whales have opened long positions totaling approximately $20 million on this new token. This influx of capital into PUMP could be detrimental for Dogecoin, as speculative traders might prioritize profit-taking with the new token, further stagnating DOGE’s price.

Despite the shifting focus towards PUMP, on-chain data from Santiment indicates that whale investors are continuing to accumulate DOGE tokens. In just one week, large addresses holding between 10 million and 100 million DOGE have collectively purchased approximately 140 million tokens. This accumulation by whales suggests a persistent belief in Dogecoin’s long-term potential, even as retail and speculative interest appears to be waning due to the allure of new tokens.

The current scenario indicates a potential for Dogecoin to recover and achieve a price target of $0.47, driven by the double-bottom pattern formation. However, this recovery is contingent upon active participation from buyers in the market. If buying pressure diminishes significantly, the risk of further price dips remains elevated, leading to increased volatility in Dogecoin’s trading environment.

The dynamic interplay between established tokens like Dogecoin and new entrants like PUMP reflects the ever-evolving nature of the cryptocurrency market, where trader sentiment can shift rapidly. As interest in new projects can often lead to short-term profit-taking from established assets, the ability of Dogecoin to maintain its market position will depend on a combination of technical indicators and broader market sentiment. The next few days will be critical for DOGE as it seeks to navigate these challenges and capitalize on potential bullish signals. Traders and investors alike will be closely monitoring the situation, as Dogecoin’s price trajectory remains uncertain amid the excitement surrounding new market entrants.