Dogecoin Price Could Cool Off Briefly, but a 74% Rally May Still Be in Play

When investors pull DOGE or any crypto out of exchanges, it usually means theyre holding onto it, expecting prices to rise. This “accumulation” trend reduces the selling pressure and often sets the stage for price growth.

The last time we saw similar net outflows on major exchanges, DOGE rallied sharply in the following weeks. With the current negative flows still intact, its a hint that the bullish sentiment is far from over.

Funding Rates Are Overheating; Short-Term Caution？

Now lets talk about the derivatives market. A useful tool here is the Open Interest (OI)-Weighted Funding Rate. On July 21, the DOGE OI-weighted funding rate hit 0.0239, a level that usually signals excessive bullish leverage.

Overheated funding rates || Source: TradingView

These moving averages help traders see the market‘s trend. When shorter-term averages cross above longer-term ones, it usually means buyers are taking control. The crossover that occurred around July 15 coincided with DOGE’s price surge from around $0.20.

Dogecoin Price Action Suggests Rally Isnt Done Yet

As of now, DOGECOIN PRICE is sitting just above the $0.27198 resistance, now turned into a support zone. The price reached as high as $0.2785 before slightly cooling down.

Technical charts show a possible pause before DOGE resumes its upward move. Based on the Fibonacci extension, the next major resistance lies near $0.3518. But the real target sits much higher, at the 2.618 extension level of $0.48103.

Dogecoin price action | Source: TradingView

If DOGE does manage to resume this rally, the move from its current level around $0.275 to the $0.481 target would represent a nearly 74.5% potential gain.

While DOGE may take a short breather, possibly down to $0.243 as part of the correction, the broader structure still points to more upside.

Another reason to expect a breather or correction is the formation of a “Cup-and-Handle” pattern. While the cup seems complete, the handle often hints at a minor correction or retracement.

In DOGEs case, the retracement could mean hitting the $0.22 support level. This level also aligns with the strongest Fib level of 0.618 and should be able to keep the prices from correcting.

However, the short-term correction or the bearish angle might get invalidated if the Dogecoin price crosses the $0.3 mark. In that case, we can expect the rally to continue without many breaks.