The creator of Dogecoin highlighted the massive spike in the number of transactions on the chain as the metric suddenly hit almost 70,000 operations in the last 24 hours.

The spike in the number of transactions on Doge was followed by the unexpected recovery of the cryptocurrency market. Ethereum and Bitcoin were on the rise during the weekend trading session as the two biggest cryptocurrencies gained 11% and 6%, respectively.

nice, the dogecoin blockchain transactions are spiking pic.twitter.com/P6jaf4cwhF

— Shibetoshi Nakamoto (@BillyM2k) July 17, 2022

As for the price performance of DOGE, the memecurrency is gaining around 5% to its value, which is a mild gain for such a volatile asset. The potential reason behind the spike in the number of transactions on the Dogecoin network might be the increased activity of whales.

With the market showing some signs of recovery, whales are potentially staking more DOGE ahead of a potential recovery run. For the first time in the last five months, Dogecoin formed a higher low during its movement, showing a potential reversal on the market.

The massive rise in the number of transactions on the network could also be a signal of upcoming selling pressure on the market as whales may potentially start moving their funds from cold wallets to exchange addresses.

In this case, Dogecoin’s small recovery run would be over almost immediately as there is not much volume on the market that could absorb another spike in selling pressure. The memecoin has been moving in a sharp downtrend for more than a year after hitting an ATH back in May 2021.

At press time, Dogecoin is trading at $0.066 and showing around a 15% price increase in the last seven days of trading.

Dogecoin DOGE/USD was spiking up over 3% higher at one point on Saturday, showing strength in comparison to Bitcoin BTC/USD and Ethereum ETH/USD, which were trading flat.

On Friday, Benzinga pointed out a bounce was likely to come because at that time Dogecoin was printing a hammer candlestick on the daily chart. While Dogecoin didn’t close the 24-hour trading session with a hammer candlestick, the crypto ended up printing a long-legged doji candlestick, which is also a bullish reversal indicator.

Dogecoin has settled under a descending trendline on the daily chart, which acts as a resistance level and indicates there are more sellers than buyers, causing the price to continue to fall.

In order for a trendline to be considered valid, the stock or crypto must touch the line on at least three occasions. After that, the more times the trendline is touched, the weaker it becomes.

• Bullish traders can watch for a stock or crypto to break up from the descending trendline and, if the break happens on high volume, can indicate the downtrend is over and a rally may be on the horizon. It’s possible the stock or crypto may fall down to back-test the descending trendline as support before heading higher again.
• For bearish traders, “the trend is your friend” (until it’s not) and a touch and rejection of the descending trendline can offer a good short entry. A bearish trader would stop out of this type of trade if the stock or crypto breaks above the trendline.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Bullish Case For Dogecoin: Bulls want to see bullish volume come in and break Dogecoin up from the descending trendline, which could signal a big reversal to the upside is in the cards. If Dogecoin is able to break up from the trendline, it will also regain support at the eight-day exponential moving average (EMA), which will give bulls more confidence going forward.

Dogecoin has resistance above at $0.135 and $0.146.

The Bearish Case For Dogecoin: Bears want to see Dogecoin continue to reject the descending trendline, which has happened on the past two occasions that the crypto attempted to break the trend. If Dogecoin continues to reject that area as resistance, the trendline and the eight-day EMA could continue to guide the crypto lower until it loses support at the 12-cent level.

Dogecoin has support below 12 cents at the 10-cent mark, which is an important psychological level.

See Also: How to Read Candlestick Charts for Beginners