The world-renowned meme cryptocurrency Dogecoin (DOGE) is currently experiencing heightened selling pressure despite signs of persistent resilience. As large investors reduce their positions and a bold new protocol proposal emerges, the future trajectory of DOGE is being shaped in real time.
Whales Reduce Holdings Amid Market Sentiment Shift
Major holders of DOGE, known as whales, have been consistently decreasing their positions over recent weeks. According to on-chain data, addresses holding between 10 million and 100 million DOGE now represent just over 16% of the total supply, down from nearly 17% in July.
This reduction reflects a broader risk-averse sentiment in the cryptocurrency markets, where investors are opting to minimize risks amid uncertainty. Concurrently, the futures market also indicates caution.
Open interest, which measures the total value of outstanding contracts, has sharply declined from a peak of $5.35 billion in July to around $3.54 billion. This downturn suggests that traders are less inclined to aggressively bet on short-term price gains, limiting the chances of an immediate rebound.
Dogecoin Network Activity Slows
On-chain data from Glassnode indicates that daily active addresses have plummeted from over half a million in June to under 50,000 by the end of August.
This sharp decline in user activity reveals a waning demand for DOGE as a medium of exchange, subsequently hampering price performance. Despite the setbacks, Dogecoin has managed to maintain a key technical level near $0.21.
Analysts suggest that this level, supported by the 100-day and 200-day exponential moving averages, has become a critical defense line for bullish investors. Should this level break, significant support levels would follow at $0.18 and $0.16.
Project Sakura Promises Potential Disruption
Amid these pressures, the Dogecoin Foundation has unveiled Project Sakura, an experimental protocol that could reshape the network. Director Timothy Stebbing described the initiative as a step towards transitioning Dogecoin from its current proof-of-work system to proof-of-stake.
This shift, he argues, would enhance the network’s security against 51% attacks and align with Dogecoin’s long-term ambition to become a genuine global currency. The idea of staking has divided the community, with some viewing it as a necessary innovation while others see it as a departure from the coin’s original ethos.
If implemented, the protocol change could attract institutional support and redefine Dogecoin’s role beyond its meme coin label.
Technical Outlook Indicates Potential for Volatile Movement
On the charts, DOGE is trading within a symmetrical triangle near $0.22, as indicated by crypto analyst Ali Martinez.
Dogecoin $DOGE: One last dip before the breakout! pic.twitter.com/DQh70ilOas
— Ali (@ali_charts) August 25, 2025
The resistance level sits at $0.25, while the base of the triangle is around $0.165. This structure, which reflects weeks of consolidation, typically precedes sharp movements once the price breaks out in either direction.
From a technical perspective, such consolidation rarely lasts long, suggesting that a breakout could be closer than anticipated. If Dogecoin manages to hold support and breaks upward, it may target $0.44 in the near term, representing a potential gain of approximately 170%. However, failing to defend $0.21 would open the door for a drop to the $0.18-$0.16 zone.
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