DOGE may welcome a new round of pump after a short pullback. On-chain data and RSI divergence release favourable information.

[Coin World] The price of DOGE ( has fallen by more than 13% in the past week, after a strong rise of 31% over the previous three months. Although the current price appears to be fluctuating within a range, this consolidation may be deceptive. Some on-chain and technical signals indicate that hidden strength is building beneath the surface, especially a key divergence that traders often overlook.

Short-term holders capitulate, but the cost basis support begins to take effect.

The first sign of a change in sentiment comes from the short-term holders' unrealized net profit/loss )NUPL(. This indicator tracks the unrealized profits and losses of wallets that purchased DOGE in the past 155 days; typically, these are the participants who react the fastest in the market.

As the price fell from the late July high, short-term holders' NUPL dropped significantly from the 0.24 peak on July 20 to 0.06 on July 28. This is a clear sign that many recent entrants are either selling for small profits or are caught in slight losses; this is a common phenomenon when a pullback shakes out the weak hands.

However, this wave of short-term capitulation may have already hit a wall, right at a strong support area. The cost basis heatmap of DOGE (depicted by average acquisition price of wallet clusters) shows a significant supply zone around $0.21. Over 9.77 billion DOGE are located within this range, indicating that many holders bought at this level and may defend it. Historically, these areas have acted as support levels for DOGE prices during pullbacks.

The combination of emotional exit (declining NUPL) and structural defense (cost basis support) creates a perfect setup: panic is fading, while strong hands are holding the line.

As sellers lose momentum, hidden bullish divergence forms.

There is now a momentum signal that could change the script: a hidden bullish divergence has appeared on the Relative Strength Index )RSI(. The RSI tracks the strength of price movement; typically, in a bullish trend, price and RSI rise together. However, the hidden divergence breaks this pattern.

In the past few days, the price of DOGE has been forming higher lows, which is a sign of buyers stepping in more quickly during the downturn. However, the RSI has been forming lower lows, indicating that while momentum has cooled, the price structure remains intact. This divergence is key; it suggests that sellers are losing momentum rather than gaining it.

Hidden bullish divergence often occurs during consolidations or pullbacks in larger uptrends; this is the context here, with DOGE still rising over 30% in the past three months. This form of divergence indicates that the broader DOGE price uptrend remains intact, and what is happening is merely a consolidation, not a bearish reversal.

When the NUPL of short-term holders falls into a state of capitulation, combined with the cost basis heatmap holding firm at $0.21, the RSI setup not only suggests strength; it provides reasons for the bullish continuation brewing beneath the surface.

The price of DOGE needs to break through to confirm the setup.

DOGE is currently trading slightly below 0.23 USD, hovering between the key Fibonacci levels: 0.23 USD (0.382 retracement level) and 0.21 USD (0.5 retracement level). For the bullish divergence narrative to fully play out, the price needs to stay above 0.21 USD and reclaim 0.25 USD. A breakout above 0.25 USD will open the door to 0.28 USD, where the next resistance level lies.

However, if the $0.21 region is broken, momentum will fade, and the price may return to $0.19 or even $0.17, which would invalidate the bullish argument. However, the cost basis heatmap clearly shows how strong the $0.21 level is.