As an analyst with over a decade of experience in the crypto market, I have witnessed the rise and fall of numerous digital assets. Observing Dogecoin (DOGE) today, I can’t help but feel a sense of deja vu. The network activity data indicates that DOGE is at risk of a significant price decline, which is concerning given its past popularity.
The popular meme cryptocurrency Dogecoin (DOGE) could experience a substantial drop in price because its network activity has been stagnant recently. While certain other indicators have shown bullish trends, this particular on-chain metric remains crucial for the continued expansion of DOGE.
Dogecoin Network Activity On The Low
According to information from market intelligence platform IntoTheBlock, the trend for Dogecoin’s net network growth appears bearish and hasn’t seen a significant rise recently. Additionally, data indicates that the number of new addresses on its network has decreased by nearly 10% over the past week.
On a recent post from X (previously Twitter), IntoTheBlock shared additional details about the reduced activity in Dogecoin’s network and its dependence on existing supporters thus far. As per the platform, there’s been a gradual decrease in the creation of new wallet addresses, suggesting that fewer new investors are entering the network.
Due to recent events, the transaction count on the network has fluctuated significantly over the past three months. While IntoTheBlock observed some notable peaks, these instances proved temporary, suggesting that Dogecoin has struggled to attract and retain a consistent wave of new users.
It’s plausible that the significant increases in Dogecoin transactions stem from existing network participants rather than new investors, due to the decrease in the rate of new addresses. This decline in new addresses could be why Dogecoin’s price performance has been underwhelming compared to other meme coins such as Pepe (PEPE), which have experienced more impressive price surges.
Meanwhile, IntoTheBlock emphasized that Dogecoin’s diamond holders played a crucial role in maintaining its price level despite lower transaction volumes for the meme coin. These long-term investors, who typically hold their coins for over two years and three months, have continued to keep their investments, even though there may not be much network activity.
According to data from IntoTheBlock, over two-thirds (68.11%) of Dogecoin investors are still making a profit, as they purchased the meme coin when its price was under $0.10. This indicates that many investors bought DOGE even before it experienced significant price increases.
Plausible Explanations For DOGE’s Slowing Network Growth
A possible reason for the decrease in activity on the Dogecoin network could be that new investors find limited potential in DOGE at its current price point. Consequently, they are gravitating towards emerging meme coins, which they perceive as offering greater returns. In truth, Dogecoin has underperformed compared to these up-and-coming meme coins.
Compared to Dogecoin, some alternative meme coins like Dogwifhat and Pepe have seen extraordinary growth this year, with gains exceeding 1,000% and 500% respectively. This explosive growth, along with the increasing number of new meme coins being launched daily, particularly in the Solana ecosystem, has led to a shift in focus away from Dogecoin. This is because it’s now attracting less attention compared to its past performance.
Currently, as I’m typing this, Dogecoin is being exchanged at approximately 0.099 USD. In the past 24 hours, it has increased by nearly 2%, based on information from CoinMarketCap.
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2024-08-09 00:11