Dogecoin Tsunami Returns: Price Breakthrough or Market Deception?

Dogecoin (DOGE) has recorded the highest number of active addresses in six months, with over 650,000 trading wallets this week. The increase, last seen in November 2024, coincides with retail investor interest and new speculative trading. Despite bullish technical signals, on-chain data suggests caution as take profit risks are present.

The increase in active addresses is consistent with the recent bullish increase of DOGE to $0.226, although the token remains below the 2025 peak of $0.41. The Net Unrealized Profit/Loss index (NUPL), which tracks investor profits, has entered the "Optimistic" zone, indicating that most holders are in profit. Historically, such conditions occur before selling pressure if prices stagnate near resistance levels.

On-chain data shows that the buyback cost and actual profit are approaching the levels observed last in February, a period that was followed by a 30% price correction. This pattern raises the question of whether current holders will secure profits or hold on for higher targets. DOGE is facing immediate resistance at $0.30, a level it has not maintained consistently since January. According to technical analysts, a breakout above this threshold could push the token up to $0.36–0.41. Support is at $0.20, with a breakdown at risk of retesting the long-term trend line near $0.145.

The Moving Average Convergence Divergence indicator ( MACD ) gives a bullish signal, while the Relative Strength Index ( RSI ) at a level of 62 indicates that there is a possibility of price increase before an overbought condition occurs.

However, the trading volume, exceeding 5 billion dollars during the bullish trend, is disproportionate to the growth in decentralized finance (DeFi) activity. The total value locked (TVL) of Dogecoin DeFi remains below 5 million dollars, highlighting the disconnect between speculative trading and network utility. The discrepancy between the price action of Dogecoin and its DeFi metrics highlights its reliance on sentiment rather than functional use cases. While social media chatter and celebrity endorsements often drive bullish trends for DOGE, the lack of ecosystem development raises concerns about sustainability. ETHNew analysts note that without utility expansions - such as application in payments or DeFi protocols - the price of Dogecoin may struggle to maintain its gains during a bear market. Currently, traders are focusing on technical patterns and broader cryptocurrency trends, especially Bitcoin's stability above $100,000, which could impact altcoin momentum.