Dogecoin (DOGE) Bulls Could Take Control After Recent Slump
Dogecoin (DOGE) had a difficult month, losing around 25% of its value in February. Nevertheless, the DOGE community is hopeful for a rebound, as network activity has been showing some promising signs. The question is whether these developments are enough to spur bullish sentiment and potentially reverse DOGE’s current price trend.
Positive Divergence as Network Activity Soars
Over the last 30 days, the world’s largest meme coin has dipped by nearly 25%. However, a closer look at on-chain data indicates increased network activity could spur a rebound. Cryptocurrency analytics firm Santiment has reported a recent spike in Daily Active Addresses on the DOGE network.
Since 1st March, the number of Daily Active DOGE Addresses has spiked by 40% despite the bearish run. The positive divergence between DOGE’s price and Daily Active Addresses suggests that this could be an indication of new participants looking to buy the dip. Historically, previous DOGE rallies have been preceded by spikes in Daily Active Addresses.
Similarly, an analysis of transaction volumes on the DOGE network in recent days paints a bullish picture. The Daily DOGE Transaction Count has doubled within the last seven days, reaching its highest daily throughput volumes in 2023. Judging by the historically positive correlation with the price, DOGE holders could expect a price rally to follow the recent trend.
Dogecoin (DOGE) Price Prediction: Stiff Resistance Ahead
In terms of price predictions, IntoTheBlock’s Global In/Out of Money (GIOM) data offers some valuable insights. Currently, only 24.5% of DOGE holders are in profitable positions. This suggests that most crypto investors may avoid selling at big losses around current prices.
On-chain data indicates that the next price rally for Dogecoin will likely face stiff resistance around the $0.075 area, where 81,000 addresses holding 35 billion DOGE may decide to take profits. However, if DOGE manages to cross this hurdle, it may go up to $0.084, where nearly 400,000 addresses hold 34 billion tokens.
If things take a bearish turn, the 333,000 addresses that bought 4.8 billion DOGE around $0.64 will offer significant support. Nonetheless, given the low volume around this level, Dogecoin may slide further in the event of a correction to around $0.56, where 435,000 addresses have bought 6.7 billion DOGE.
Conclusion
Dogecoin’s recent slump may have unnerved some investors, but the positive divergence between network activity and price suggests that a rebound could be ahead. Additionally, IntoTheBlock’s price predictions give hope to DOGE holders that the bull run may be on the horizon. However, despite the positive news, investors should always exercise caution and be mindful of the risks inherent in the cryptocurrency markets.
