Despite a noticeable increase in the number of active wallets in the past month, Dogecoin (DOGE) failed to register a significant price increase. This contrast raises questions about the factors that influence DOGE’s market behavior.
Increased network activity, unresponsive price for Dogecoin
Dogecoin recently experienced a surge in network activity. Accordingly, the number of daily active addresses participating in DOGE transactions exceeded 45,000 last month. Typically, such an increase in network activity indicates increased interest in the asset. It also often precedes a price rally. However, the value of DOGE remained relatively unchanged.
Despite complex markets, active addresses for most top blockchains have remained stable. Some assets, like $LTC and $DOGE, even showed significant spikes in activity recently.#Bitcoin #Ethereum #Dogecoin #Litecoin pic.twitter.com/PI1KxcoT5k
— IntoTheBlock (@intotheblock) August 19, 2023
There is a possible explanation for DOGE’s lack of price increase despite increased network activity. Its strong correlation with Bitcoin (BTC). Last month, Bitcoin’s price fell by 12%. Dogecoin DOGE also followed suit, down almost 10%. At the time of writing this article, Dogecoin was trading at around $0.06406.
addiction to bitcoin
Moreover, the recent price drop of Dogecoin DOGE can also be attributed to the decrease in the number of transactions involving the cryptocurrency. According to IntoTheBlock, daily DOGE transactions have declined steadily since July 30. As of August 19, only 79,150 DOGE transactions have been registered. This represents an 89% decrease from the 739,830 transactions reported at the end of July.
The decline in DOGE transactions over the past month has been particularly evident among whale transactions. DOGE transactions, valued between $100,000 and $1 million, were down 21%. On the other hand, there is a 46% decrease in those with a value between 1 million and 10 million dollars. There is a 100% reduction in transactions exceeding 10 million dollars.
Concerns for the future
A closer examination of Dogecoin DOGE in the futures market shows that its price may face more challenges. Santiment data shows that there has been a significant drop in the altcoin’s Open Position since August 14. On the other hand, it reveals that it has dropped about 50% in just five days. Also, funding rates on major exchanges such as dYdX and Binance remained significantly negative over the same period. This indicates that investors are actively betting against DOGE’s price increase. It also shows that if sentiment continues, it will potentially put downward pressure on the coin.
When we look at Cryptokoin.com, although increased network activity generally bodes well for cryptocurrency prices, Dogecoin DOGE’s stagnant value raises concerns. The dependence on Bitcoin’s performance and the significant drop in transactions, especially among large investors, add to DOGE’s recent difficulties. In addition, indicators from the futures market point to a potential drop in DOGE’s price.
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