Dogecoin forms a cup and handle pattern – Is a strong rally approaching?

Dogecoin (DOGE) has strongly bounced from the support level of $0.14, marking the start of a new uptrend after completing the rounded bottom pattern and confirming the breakdown of the "cup and handle" pattern – a technical signal that often indicates a clear upward trend.

This development has brought DOGE back inside the parallel channel, with the current price hovering around the $0.182 region. If this meme coin can break through the resistance level of $0.198, the upward momentum could be extended towards the target of $0.25 in the coming weeks.

However, if DOGE is rejected at this level, it is highly likely that it will enter a short-term accumulation phase. Nevertheless, the symmetry of the price pattern along with the positive reaction at the important support zone indicates that the bulls are still in control. To reinforce this upward momentum, DOGE needs to firmly maintain above the $0.16 mark in the short term.

Source: TradingView## Are investors laying the groundwork for a stronger price increase of Dogecoin?

In the past 90 days, the Cumulative Volume Delta (CVD) index of DOGE in the spot market has consistently leaned towards the bulls — a sign that strong demand is still prevailing.

This dominance not only reflects a strong belief from investors but also reinforces expectations for a continued upward trend, even during short-term corrections.

Historically, the periods when the bulls have a clear advantage are often the precursors to significant breakouts, especially when combined with technical patterns that have a positive trend.

Source: CryptoQuantWith stable buying pressure from the spot market, the bullish outlook for DOGE is being strongly supported. However, if this accumulation momentum weakens and buying power stalls, this meme coin may face the risk of a pullback if it cannot break through key resistance levels.

Why are traders withdrawing Dogecoin from the exchange?

Spot Netflow data recorded that on July 10th alone, over 8.5 million USD Dogecoin (DOGE) was withdrawn from exchanges — continuing a streak of days with continuous outflows. This trend clearly reflects the tendency of investors to prioritize self-custody of assets or pursue a long-term holding strategy.

This is often an initial signal for the accumulation phase, when investors withdraw assets from the exchange to limit the risk of a sell-off, thereby reducing the selling pressure in the market.

Although it cannot be definitively stated that the price will increase, the reduction in the circulating supply of DOGE may set the stage for a price surge in the future.

Source: CoinglassHowever, if the capital withdrawal trend suddenly reverses, it could signal profit-taking activity – thereby putting significant pressure on the price recovery momentum.

Does derivative data signal the next turning point for DOGE?

As of now, the open contract (OI) has recorded an impressive increase of 15.09%, rising to $2.44 billion – indicating that new capital is strongly flowing into the DOGE futures market.

At the same time, the funding rate continues to maintain a positive state at +0.0093%, reflecting that Long-position traders are willing to pay fees to the Shorts – an early signal indicating that expectations for an upward trend are still prevailing.

The combination of strong inflows of capital and stable optimistic sentiment is further reinforcing confidence in the bullish outlook from the derivatives trading community.

Source: CoinGlassHowever, it is important to note that excessive leverage in the context of the spot market, which has not yet shown consensus, could put DOGE at risk of mass liquidation. Currently, the indicators still lean towards the bulls, but investors should cautiously monitor unusual fluctuations in the Funding rate and the sudden spike in OI to timely adjust their strategies.

Can DOGE maintain its upward momentum?

Dogecoin is sending out optimistic signals, as the price bounces strongly from the support zone, open contracts surge, and buying pressure is clearly dominant — all of which indicate that the upward trend is likely to continue.

However, the important resistance zone at the level of $0.198 remains a major challenge to overcome. If DOGE can decisively break this threshold, the next target around $0.25 is completely within reach. Conversely, being rejected here could trigger a short-term correction.

Currently, the technical signals and on-chain data are still leaning towards the bulls. However, to maintain a strong upward momentum, DOGE needs support from robust trading volume along with the overall market stability in the upcoming sessions.

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