The Disappointing Dogecoin Price Action can change very quickly On-chain data suggests increased activity behind the scenes. Notably, on-chain analytics firm IntoTheBlock revealed a surge in daily transactions on the Dogecoin blockchain, bringing the number to its highest point since July.
DOGE has not yet substantially broken above the $0.10 price level, while still underperforming. Despite the meme-inspired cryptocurrency’s widespread popularity and status as a top digital asset, price action has not produced explosive gains in recent months.
Daily Dogecoin Transaction Hits Highest Level in 2 Months
As noted by IntoTheBlock, Dogecoin processed a total of 1.93 million transactions on its blockchain last week. This marks an interesting increase of over 100% compared to the total number of transactions processed in the previous week. The data highlights a renewed burst of activity on the Dogecoin network that broke the pattern of sluggishness that had characterized its performance in recent months. Furthermore, IntoTheBlock highlighted that this number of transactions was the highest weekly activity recorded since the first week of July, showing a gradual change in sentiment among the Dogecoin community.
Dogecoin processed 1.93 million transactions last week, the highest number of weekly transactions since early July.
While this increase is still well below the February peak, it is a promising sign for the $DOGE network. photo.twitter.com/9WfNMAaEZo
— IntoTheBlock (@intotheblock) September 17, 2024
While the transaction count is still low compared to what the Dogecoin blockchain has processed in the past, it is somewhat significant because it follows nine consecutive weeks of low transaction counts and minimal growth in on-chain activity. For Dogecoin, activity has been truly dry since February and March, when it consistently processed over 10 million transactions for consecutive weeks.
What does this mean for the price of DOGE?
Rising transaction volumes for cryptocurrencies are generally related to an increase in buying momentum among traders. This is especially true in cases where the asset has been stuck in sluggish activity for a long time. The spike in DOGE transactions signs of an optimistic sentiment among traders, which could have a positive impact on Dogecoin’s price in the short term. However, whether this increase will translate into sustained price growth remains to be seen at the time of writing.
At the time of writing, Dogecoin is trading at $0.1015, just above the critical $0.10 level. This slight price increase comes after Dogecoin briefly dropped below $0.10 on September 16. Although the meme coin has managed to recover, its price growth has slowed down, suggesting that it is facing major resistance at the $0.10 level. Therefore, breaking this resistance point could be crucial for Dogecoin’s next rally.
According to Crypto analyst Ali Martinez, there is another strong resistance level at $0.11. This price level is important because there are 23,400 addresses currently holding 31 billion DOGE tokens at a loss. As such, a move to breakeven could lead many of them to sell their holdings, further adding to the resistance.
Main image created with Dall.E, chart from Tradingview.com