Dogecoin Network Activity Jumped Higher
05 Feb, 2024 ● Coin news
Dogecoin (DOGE), a well-known memecoin, has maintained a sideways trading pattern above its 200-day exponential moving average (EMA) since January 7th.
Despite a minor decline of 0.4% in the past week and a 14% decrease in the last month, indications from technical analysis suggest a potential for further losses for DOGE. However, recent activity on its network presents an intriguing development.
There has been a notable surge in Dogecoin's network activity, with market intelligence firm IntoTheBlock reporting the creation of over 890,000 new Dogecoin addresses within the past week.
This surge aligns with an 86% adoption rate as these new users conduct their initial transactions on the blockchain.
Further data from Santiment reveals a significant spike in daily active addresses (DAA), which surged from 124,240 on January 23rd to over 498,000 by February 2nd.
This uptick in network activity might be attributed to the launch of the iconic Doom video game on the Dogecoin blockchain, alongside the impending DOGE-1 launch.
Additionally, the growing utilization of Dogechain, a layer-2 blockchain integrated with the Dogecoin network, has contributed to this heightened interest.
These factors have sparked renewed interest in the Dogecoin network, potentially prompting investors to consider positions in the coin if this trend persists.
However, despite the network's activity, technical analysis indicates a potential for a deeper correction in DOGE's price from its current levels.
Since December 6, 2023, DOGE's price action has been marked by a series of lower highs and consistent lows around $0.078, forming a descending triangle on the daily chart.
Confirmation of this bearish pattern would occur with a decisive close below the support line, projected by the equal lows. Such a development could foresee a decline in price equivalent to the height of the triangle.
Yet, amidst this bearish sentiment, the relative strength index (RSI) sits in the neutral zone at 45, reflecting traders' current indecision.