Dogecoin Network Sees Surge in Activity Amid Price Decline: A Look at Market Dynamics
Summary:
Despite a 14% decrease in the last month, popular crypto asset Dogecoin (DOGE) has seen a significant surge in network activity, with over 890,000 new Dogecoin addresses created in the past week. Factors driving interest include the launch of the classic DOOM video game on the Dogecoin blockchain and increased use of Dogechain, a layer 2 blockchain based on Dogecoin. Meanwhile, technical trends suggest a potential for further price correction, although investor interest could influence the trajectory.
The well-known crypto asset, Dogecoin (DOGE), has been showcasing a horizontal trajectory, remaining above the 200-day exponential moving average (EMA) since the start of January. Despite an overall decrease of 0.4% in the past week and a 14% decrease over the previous month, it's intriguing to note a recent surge in network activity. The possibility of further losses for DOGE, as suggested by technical predictors, is juxtaposed with this spike in network operations.
In terms of network action, Dogecoin has seen a remarkable upswing. Analysis from IntoTheBlock, a market intelligence firm, has revealed over 890,000 freshly minted Dogecoin addresses in the week gone by. This influx of new addresses is concurrent with an 86% adoption rate, as these new users make their inaugural blockchain transactions.
Data from another source, Santiment, has also revealed a surge in daily active addresses (DAA), which have risen from 124,240 on January 23 to more than 498,000 on February 2.
The resurgence in network activity might be attributed to the launch of the famed DOOM video game on the Dogecoin blockchain, as well as the forthcoming DOGE-1 release. The 1993 classic game DOOM has been deployed on the Dogecoin blockchain using Ordinals technology by the developer #minidogeart. This allows for the complete retrieval of gaming data from the Dogecoin network, highlighting the benefits of blockchain for the preservation of digital assets.
An additional factor is the growing utilization of Dogechain, a secondary blockchain built on top of the original Dogecoin network.
Combined, these factors are drawing attention to the Dogecoin network, and if this pattern persists, the price of DOGE may react if investors start taking up positions in the token. Either way, technical analyses suggest a potential shift towards a deeper correction from its current levels.
On another hand, Dogecoin's price has shown a pattern of decreased highs and fairly consistent lows around $0.078 since December 6, 2023, forming a downward triangle on the daily chart. This bearish technical pattern is defined when the price closes decisively below the support line, suggesting a drop in price equal to the height of the triangle.
Regardless of this mildly negative perspective, the relative strength index (RSI) currently stands neutral at 45, indicating a state of ambivalence amongst traders. This report doesn't offer financial advice or suggestions — every instance of investment and trading carries risk, and readers should undertake their own research when deciding to invest.
Published At
2/2/2024 9:56:59 PM
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